API Compliance: How To Enforce Data Compliance With Your APIs

Ensuring API compliance is critical to the success of your Application Programming Interface (API) programs.

APIs let consumers access, interact, and extract an enterprise’s functionalities and data. And if these exposed services fall into the wrong hands, it could lead to serious security ramifications.

Several regulations and policies have been instituted worldwide that stipulate how businesses can acquire, manage, and expend users’ data.

As an API provider, following these guidelines will ensure your exposed data, which is at the heart of your business, is safe, secure, and always available to API consumers. Otherwise, you could attract huge regulatory penalties.

Similarly, as an API consumer, going for a complaint API could help you protect your users’ data, maintain your enterprise’s reputation, and avoid regulatory penalties.

APIs have become essential in fuelling the digital transformation efforts of most businesses. While APIs are greatly beneficial, they can raise serious privacy and security issues.

This article will talk about how to enforce regulatory compliance with your APIs and realize their full potential.

What is API Compliance?

API compliance refers to the regulations that API practitioners must follow to ensure the sensitive data they expose are protected from mishandling, abuse, or loss.

It involves complying with the legal requirements stipulated by national laws, internal laws, or the standards set by the API industry.

These rules usually define the types of data that should be safeguarded, the accepted data exchange processes, and the penalties for failing to observe the regulations.

Worth mentioning, API data compliance ensures the privacy of users’ personal information. Personal data is anything that can be used to identify an API user—such as name, email, IP address, or national ID number.

Becoming compliant mandates API practitioners, who handle sensitive people’s personal information, to be responsible for storing that data securely in all circumstances.

Differences Between API compliance and API security

API compliance is often confused with API security. API compliance and API security have the same goals—minimizing the security risks of APIs.

Though they are closely related, they are not interchangeable. Compliance only ensures that your APIs follow the legally stipulated data protection standards.

Conversely, security is an overarching term that encompasses all the processes and techniques used to guard against API data breaches. Security ensures that sufficient strategies are implemented to mitigate API vulnerabilities.

Whereas meeting the statutory requirements may provide you with some legal defense when a security incident occurs, it may not prevent you from the other effects of a security breach, such as reputational and financial losses.

Role of API Compliance in Enterprise Risk Management

API compliance is essential in enterprise risk management. It enables organizations to follow stringent data protection and privacy laws for managing risks that may harm the integrity and availability of their data.

APIs can be a double-edged sword. On the one hand, they can provide several benefits, such as increasing productivity, reducing costs, and improving connectivity and collaboration.

On the other hand, because APIs provide programmatic access to services and data, this enhanced transparency makes them an attractive target to hacking attacks.

Therefore, it’s essential to implement robust access control and security mechanisms to guarantee the safety of the data exposed via APIs.

Ensuring your enterprise meets its data compliance requirements could secure critical company resources and protect customers’ sensitive data. Complying with legal obligations will make you accountable for monitoring and safeguarding the sensitive digital assets you expose or consume.

Besides greatly lowering the risk of data breaches, ensuring API compliance could also help you avoid costly fines often associated with non-compliance.

For example, following the much-publicized Facebook-Cambridge Analytica data scandal in early 2018, in which Cambridge Analytica misused Facebook APIs to get millions of sensitive user’s data illicitly, the social media giant was fined $5 billion for the data breaches.

Common Data Compliance Standards

There are a wide variety of laws and standards focused on data protection. Since APIs allow data transmission between software applications, API practitioners must follow these regulations to comply with them and safeguard their sensitive digital assets.

Here are some of the most common data compliance standards:

• GDPR
• HIPAA
• PCI DSS
• ISO/IEC 27001
• SOC reports

Let’s now talk about each of them.

a. GDPR

GDPR (General Data Protection Regulation) is the most hyped data compliance standard. In fact, it has set the standard and inspired the establishment of various data privacy regulations around the world. It came into effect in May 2018.

GDPR outlines the privacy and security expectations for handling users’ data within the European Union (EU). Even firms that do not have a presence in the EU, but collect and process personal information of EU residents, are required to comply with the regulations.

The GDPR has several rules that require data controllers (those who own the collected data) and processes (those who help in managing the data) to do the following:

• Uphold the rights of the data subjects;
• Minimize the amount of data collected;
• Get consent before collecting data;
• And observe other personal data protection standards.

Firms that violate GDPR regulations could be fined up to €20 million or 4% of their global annual turnover, whichever is greater.

b. HIPAA

HIPAA (Health Insurance Portability and Accountability Act of 1996) is U.S. legislation that safeguards the privacy and security of electronic health information.

The HIPAA outlines how the personally identifiable information held by healthcare professionals should be secured from theft and fraud.

As medical records are very sensitive, there is a wide range of severe penalties for failing to protect this information. For example, willfully neglecting HIPAA attracts a fine of $10,000 per violation. Repeat violations could attract an annual maximum penalty of $1.5 million.

c. PCI DSS

The PCI DSS (Payment Card Industry Data Security Standard) applies to businesses handling customers’ financial information.

The set of security requirements ensures that enterprises that receive, process, keep, or transmit credit card data operate in a safe and secure environment. It was established in 2006.

PCI DSS is not a government-mandated standard; it’s a set of rules established by the key players in the payment industry. Nonetheless, this does not make it less important.

Non-compliance with its rules could lead to hefty fines (from $5,000 to $100,000 per month until compliance is achieved), termination of the relationship with payment processors and banks, and a damaged reputation.

d. ISO/IEC 27001

The ISO/IEC 27001, also known as ISO 27001, is an international standard published by the International Organization for Standardization (ISO), in partnership with the International Electrotechnical Commission (IEC). ISO and IEC are independent, non-governmental organizations known for developing a wide range of leading international standards.

ISO 27001 stipulates how to manage information security. The standard outlines a set of best practices, policies, and procedures for an information security management system (ISMS).

It does not mandate specific information security controls. However, the checklist and framework it offers can enable you to implement, and continually improve, a comprehensive security model for your APIs.

Achieving ISO 27001 compliance lets you demonstrate to your users and other stakeholders that you are protecting their valuable information. The certification can also help in achieving compliance with other regulations, such as the GDPR.

e. SOC reports

The System and Organization Controls (SOC) is a suite of auditing reports developed by the American Institute of Certified Public Accountants (AICPA).

These reports offer proof that a firm has passed extensive audit processes and follows industry-leading security and suitability requirements. They ensure users’ data is management properly, confidentially, and securely.

Although SOC reports are voluntary, they ensure thoroughness and accuracy of data processed as well as safeguard the privacy and confidentiality of the data on transit and at rest.

There are two main types of SOC reports:

•       SOC 2: This assessment and reporting service affirms that a firm adheres to security and privacy guidelines during data processing.
•       SOC 3: Just like SOC 2, this report also assists in building trust and transparency when handling sensitive data. Unlike SOC 2, SOC 3 report can be distributed freely.

How to Enforce API Compliance

Complying with data regulations and standards will enhance consumer confidence in your products, improve data security, and help realize the value you initially envisioned with your API programs.

Here are some ways of enforcing data compliance with your APIs:

• Implement consent management
• Uphold individuals’ rights
• Improve data management
• Implement audit trails
• Practice compliance monitoring and reporting

Let’s now talk about each of them.

1. Implement consent management

According to most data privacy regulations, such as the GDPR, users should explicitly give their consent before their personal data can be collected, shared, or revoked. Furthermore, users should be allowed to opt-out of any data processing activities whenever they intend to do so.

Therefore, implementing a consent management mechanism in your APIs will help you comply with the regulations.

On your API’s backend, you can keep track of the users’ consent. This will ensure individuals can review and rescind previously given permission at any time.

For example, to prompt users’ approval for collecting or sharing their data, you may include a simple consent form on the API-driven applications.

You may include the following in the consent form:

• The name and description of the client application that will be processing the user’s data. This will help the user to understand the purpose of giving out their information.
• A section where the data subjects can give a clear affirmative action, indicating their approval to the processing of their personal information.

2. Uphold individuals’ rights

The data compliance regulations recognize the collection and processing of personal data as an individual’s fundamental right. They give individuals power over their data.

For example, for your APIs to be GDPR compliant, you must give users the following privacy rights:

• The right to be informed about how their personal information is gathered, stored, managed, safeguarded, and processed.
• The right to request and receive all the data you have about them.
• The right to make corrections to their data.
• The right to request for deletion of their personal information.
• The right to object or stop processing their personal information.
• The right to make decisions based on automated data processing.

3. Improve data management

To be compliant, you need to improve how you manage data with your APIs. You need to begin by auditing the sensitive information you have about people. This will let you minimize the data you collect and store, and fine-tune your data management processes.

You also need to implement an access management system to control how users access your exposed APIs. This is an important defense against unauthorized exfiltration of sensitive users’ data.

To control access, you can use a key and OAuth authorization to identify the applications and users calling your APIs. Such measures would dictate the endpoints a user can access and their access privileges for the specified data limit.

Another way to improve data management and adhere to the API compliance standards is to anonymize and pseudonymize real users’ data. This is a vital way of protecting personal data, especially in development or staging environments.

It’s also important to inform users and the supervisory authority of any personal data breach incidents. Your notification should include details of how you’re addressing the security breach and any action they can take from their end.

4. Implement audit trails

Implementing audit trails will help you have documentary evidence of the sequence of activities undertaken with your API.

This is important for meeting the guidelines of some data privacy regulations, such as HIPAA, which require full audit trails showing each interaction a user has with the data.

With an audit logging capability, you can record every call made to the API, give full information about a user accessing an API method, show the type of data being accessed, and demonstrate the data values being retrieved or edited.

Importantly, you should not log data in a personally identifiable format. As an example, if you’re logging requests issued by a user, you can tag the records with an internal UUID (universally unique identifier) or hash, instead of the user’s email address or IP address. You can also encrypt the data to protect them in all states—in transit or at rest.

Furthermore, maintaining audit trails is essential in objective dispute resolution. In case of disputes, either with a user or a supervising authority, you can refer to the logs to affirm your claims. It’s the best way of proving yourself to the stakeholders—both within your enterprise and at the standards regulators.

5. Practice compliance monitoring and reporting

You should be able to demonstrate compliance with the data regulations and standards. By constantly monitoring and reporting all the actions taken, you can ensure that your APIs adhere to the legal privacy requirements.

For example, you can track all the user activity associated with personal identifiable information. You may add a compliance tag to your API’s method, include annotations to your code, or insert comments. This will make it easy to track how personal information is used within your API.

To enforce API conformance reporting, you can also develop a data flow diagram that illustrates what takes place in your API. This would assist your team and regulators in assessing the level of your compliance.

With regulation tracking, you can be accountable for monitoring and safeguarding your user’s sensitive data. The ability to demonstrate that you have implemented the necessary controls and measures can enhance your reputation and advance the success of your API programs.

How the Enterprise Hub Can Enforce Compliance

The Rakuten RapidAPI Enterprise Hub is a comprehensive, white-labeled solution that can enforce compliance with your APIs.

It comes with a wide range of features to allow you to concentrate on improving your API’s functionality, knowing that security, compliance, and other regulatory requirements are already taken care of.

It’s what you need to achieve compliance with a variety of standards, laws, and regulations, such as GDPR, PCI DSS, and HIPAA.

Here are some ways you can use the Enterprise Hub to ensure API data compliance:

• The platform allows you to find and connect to the right APIs. If you consume insecure APIs, it could pose risks to your enterprise and affect compliance with the regulatory standards.
• It provides centralized, auditable management of all your APIs. With the Enterprise Hub, you can gain deeper visibility into the performance of your APIs—allowing you to identify problems quickly and avoid serious disasters.
• It allows you to govern the consumption of your APIs. With the Enterprise Hub, you can enforce access rights, provide API keys, create plans that restrict access to certain endpoints, and more.
• The Enterprise Hub is a highly secure platform. It allows you to undertake log access monitoring, identify anomalies using automated analysis and reporting, and optimize data protection using the latest security best practices, such as Transport Layer Security (TLS) and schema validation.

You may contact us right now to start using the Enterprise Hub to ensure your APIs comply with the various legal and industry requirements.

Disclaimer:

This article is for informational purposes only and not intended to be used for offering legal advice. We recommend you talk with an attorney specializing in data compliance issues to help you apply the law to your specific enterprise requirements.