API insecurity results in US$41 – US$75 billion of losses annually, according to a new report.
Imperva has released "Quantifying the Cost of API Insecurity", a new study that uncovers the rising global costs of vulnerable or insecure APIs.
The study, conducted by the Marsh McLennan Cyber Risk Analytics Center, found that larger organisations were statistically more likely to have a higher percentage of API-related incidents. In fact, enterprises with revenues of at least US$100 billion were 3-4x more likely to experience API insecurity than small or midsize businesses.
The data suggests that large companies are particularly vulnerable to the security risks associated with exposed or unprotected APIs as these mature organisations accelerate digital transformation.
An API is the invisible connective tissue that enables applications to share data to improve end-user experiences and outcomes. The volume of APIs used by businesses is growing rapidly; nearly half of all businesses have between 50-500 deployed, either internally or publicly, while some have over a thousand active APIs.
Many APIs connect directly to backend databases where sensitive data is stored. As a result, hackers are increasingly targeting APIs as a pathway to the underlying infrastructure to exfiltrate sensitive information. Today, as many as 1 in every 13 cyber incidents can be attributed to API insecurity. As the number of APIs in production multiplies, this figure is expected to grow in the coming years.
The study also discovered substantial disparities between industries. IT, professional services, and retail are most likely to suffer API-related security incidents:
Estimated percentage of incidents caused by API insecurity:
IT and Information: 18% - 23%
Professional Services: 10% - 15%
Retail: 6% - 12%
Manufacturing: 4% - 6%
Transportation: 4% - 6%
Utilities: 4% - 6%
Finance and Insurance: 2% - 4%
Educational Services: 2% - 3%
Healthcare" 0.5% - 1%
"The findings of this report highlight that it can be very costly for businesses that do not have a strategy for addressing API security," says Reinhart Hansen, director of technology, Office of the CTO, Imperva.
"It also correlates with the fact that many organisations simply don't have the right tools in place to monitor and mitigate the growing volume of API-related security threats," he says.
"To address this, organisations first need to get visibility of all the APIs in their environment, and the underlying data connected to these APIs, which is ultimately a cybercriminal's target."
When compared to other regions, Asia was found to have a relatively high incident rate with between 16% and 20% of cyber-security events related to API insecurity. This is likely due to the rapid digital transformation happening across Asia, especially in regards to mobile, as the majority of digital transactions in Asia are done via mobile.
Australia (which is not included in Asia) was also found to have a relatively high incident rate with between 12% and 16% of cyber-security events related to API insecurity. This is likely due to the fact that Australian businesses are generally more innovative and digitally mature, with complex software supply chains.
All of these factors can increase both the volume of APIs in use and the amount of data flowing through them, which raises the chances of an API-related event.
Recommendations for Improving API Security:
- Identify and classify data flowing through every API: Visibility is crucial for understanding the full schema of every API as well as identifying and classifying the data that flows through it so risks can be assessed.
- Automate discovery: APIs are produced quickly and modified often, making them a blindspot for many organisations. Through automation, organisations can eliminate rogue or shadow APIs. Further, by automating API inventory, the security team will have visibility into when developers modify APIs in production.
- Enable API governance: For organisations in highly regulated industries, an API governance model is crucial. This is only possible with visibility that extends beyond the API endpoint and into the underlying payload so sensitive data can be adequately protected.
"At the root of every API-related security incident is data," says Hansen.
"Protecting APIs requires a mindset shift; one that focuses on the discovery of every API and the classification of the data that flows through it," he says.
"This approach requires a mutual working relationship between the security and development team, where security is embedded into the development lifecycle. Until then, cybercriminals will continue to target vulnerable APIs to exfiltrate sensitive data."