The necessity of API security for B2B fintechs

APIs are the backbone of modern fintech; the connective tissue enabling seamless integration and powering embedded finance across platforms. Yet as the adoption of APIs grows, so does the challenge of managing sensitive financial data securely. As I discussed on a recent episode of FinTechTalk, fintech firms can take some critical steps to manage their financial data even more securely.

 

What is sensitive financial data?

 

Sensitive financial data encompasses personally identifiable information (PII), account, authentication and transaction information – all governed by stringent compliance requirements such as GDPR and PCI DSS. While financial services firms excel at securing data at rest, data in transit often remains a vulnerability, particularly if developer onboarding relies on outdated methods such as API keys and secrets. These legacy practices expose systems to unnecessary risks such as data breaches and compliance failures.

 

The role of key management in API security

Key management is a cornerstone of robust API security. While key rotation – periodically regenerating certificates and keys – is widely recommended to reduce the impact of compromise, protection depends on the security of the keys themselves. For exportable keys, regular rotation is essential to mitigate risks. However, firms can minimise operational overheads and reduce the likelihood of errors or downtime by using non-exportable keys, allowing a firm to focus on growth, not maintenance.

 

Financial API (FAPI) framework adoption

Forward-thinking firms are adopting comprehensive frameworks such as FAPI from the OpenID Foundation. By ensuring secure and efficient API connectivity, FAPI mitigates risks and simplifies operational workflows, making it a crucial element for firms navigating the complexities of modern financial ecosystems. FAPI enables this by mandating asymmetric cryptography and eliminating insecure practices, offering a higher assurance standard tailored for sensitive datasets.

 

API security as a strategic differentiator

As embedded finance accelerates, the ability to offer seamless, secure integrations becomes a vital competitive advantage. Here, API security is not just about compliance – it is also a strategic differentiator. Firms that prioritise developer experience – simplifying onboarding, enhancing usability and fostering trust – gain a competitive edge in today’s data-driven world. Future-proofing with advanced API security while delivering an exceptional developer experience is essential for building sustainable, scalable ecosystems. From automating key management to eliminating vulnerabilities in data transit, adopting advanced API security practices positions a firm to take the lead in an increasingly interconnected financial landscape.

 

The path to trust and scalability

It’s not a nice-to-have: firms aiming to scale their embedded finance capabilities and strengthen their position within financial ecosystems must adopt advanced API security measures. By integrating high-assurance frameworks such as FAPI and prioritising efficient key management, firms can build trust with developers and partners while ensuring compliance and reducing risks. Streamlining these processes isn’t just a technical upgrade – it’s a strategic investment in long-term growth.

 

Prepare your fintech for the future of embedded finance

To prepare your business for the future of embedded finance, advanced solutions such as Raidiam Connect play a pivotal role. This FAPI-grade platform enables the secure onboarding of thousands of developers for financial services firms across Australia, Brazil, the UK and beyond. Raidiam Connect integrates seamlessly with existing authorisation systems to simplify the complexities of API management, supporting first-party, third-party and internal API consumers.

 

By reducing operational expenses and enhancing developer experiences, Raidiam Connect empowers organisations to scale confidently in an evolving market. From automated key management to streamlined certificate handling, it allows businesses to navigate API ecosystems, security and compliance with precision and ease.

 

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Learn more about the benefits that Raidiam Connect can bring to your business here

 

To gain further insights from Barry O’Donohoe on optimising APIs for sensitive financial data, listen to his appearance on Business Reporter’s FinTechTalk podcast here

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By Barry O’Donohoe, CEO and co-founder, Raidiam