Why Shadow APIs Pose a Greater Threat than You Realize in 2023, we explore what Shadow APIs are, why they are risky, and how to reduce risks in this article.APIs (Application Programming Interfaces) are the foundation of the financial system in modern times. They enable software applications to communicate with each other, facilitating the sharing of data and functionality. However, not every API operates equally. Shadow APIs, also known as hidden APIs or undocumented APIs, present a significant threat to businesses and their customers. As the usage of shadow APIs grows, businesses must take action lower the risks for them. Failure through so could result in issues like expense, bad press, and legal fees.

The Importance of API Security


APIs are an essential component of modern software development and digital transformation. APIs enable organizations to connect their systems and applications, allowing for the seamless exchange of data and functionality. However, APIs also present a significant security risk. APIs are often exposed to the public internet, making them vulnerable to cyberattacks. Organizations can face financial loss, bad press, and data theft as a result of API hacking.

Due to the growing use of APIs in company processes, the need for API security growing more pressing. APIs are now used by some applications, like Internet of Things (IoT) devices, clouds, and mobile apps. As a result, the potential attack surface for APIs has increased, making them a prime target for cybercriminals.

The Risks of Shadow APIs

Risks of Shadow APIs

Shadow APIs pose a unique security risk to organizations. Shadow APIs are often created by developers for testing purposes or to access data that is not readily available through official APIs. These APIs are not documented or supported by their creators, making them vulnerable to cyberattacks.

Shadow APIs are also more difficult to monitor and secure than official APIs. Because Shadow APIs are not documented or supported, they are not subject to the same levels of scrutiny and security testing as official APIs. Shadow APIs are next prone to cyberattacks like man-in-the-middle, injection, and denial-of-service.

The consequences of a Shadow API breach can be severe. Shadow APIs can expose secret data, including credit card numbers, company secrets, and financial information. For businesses, a breach of it may have negative financial, social, and legal effects.

Mitigating the Risks of Shadow APIs


To mitigate the risks associated with Shadow APIs, organizations must take proactive measures.

Firstly, organizations should identify all Shadow APIs running in their environment and assess their risk levels. This process may involve scanning code repositories, logs, and network traffic to identify Shadow APIs.

Secondly, organizations should implement API security testing to identify vulnerabilities in Shadow APIs. To find common vulnerabilities like SQL injection, XSS, and injection attacks, this testing requires both manual and automated testing.

Thirdly, organizations should implement API security policies that prohibit the use of Shadow APIs and enforce strict guidelines for API development and testing. This policy should include guidelines for API documentation, testing, and deployment.

Finally, organizations should implement API monitoring to detect and respond to potential security incidents. Real-time API traffic and logging should be included in this monitoring, plus automated notifications for odd activity.

What are Best Shadow APIs and Why Do They Exist?

Developers create Shadow APIs for various reasons, such as testing, accessing data not readily available through official APIs, or circumventing API limitations. Companies may also inherit Shadow APIs due to mergers and acquisitions where different systems are integrated without proper documentation or testing. In these scenarios, Shadow APIs are not officially documented or supported by their creators, posing a potential risk to businesses and their customers.


In recent years, Shadow APIs have become more prevalent, with the number of shadow APIs used by organizations increasing by 30% in 2022 alone. In addition, 65% of organizations are unaware of the shadow APIs running in their environment. Shadow APIs also account for the majority of API breaches, with 80% of all API breaches involving undocumented APIs.

Why Shadow APIs are Dangerous


Shadow APIs present a bigger risk than official APIs since they are not as well reviewed and tested for security. So man-in-the-middle, denial-of-service, and injection attacks are common on shadow APIs. Organizations can die from data breaches, economic losses, and damage as a result of these attacks.

Examples of Shadow API Breaches


One of the most well-known Shadow API hacks happened in 2022, affecting a major banking organization plus 100 million members. The breach was caused by a Shadow API that had been created by developers to access data that was not available through official APIs. In another story, a Shadow API developed by another developer lead to a data breach on a popular internet platform. The breach resulted in the theft of millions of user records.

How to Mitigate the Risks Associated with Shadow APIs


To mitigate the risks associated with Shadow APIs, organizations should take several steps. Firstly,

Empowered organizations must proactively identify all Shadow APIs operating in their environment and thoroughly evaluate their risk levels to determine why shadow APIs expose potential security vulnerabilities. Secondly, organizations should implement API security testing to identify vulnerabilities in Shadow APIs. Thirdly, organizations should implement API security policies that prohibit the use of Shadow APIs and enforce strict guidelines for API development and testing. Finally, organizations should implement API monitoring to detect and respond to potential security incidents.

Conclusion


In conclusion, Shadow APIs pose a significant security risk to organizations. Organizations must be active in identifying and reducing risks brought by Shadow APIs that grow worse. Organizations may guarantee the safety and truth of their APIs and shield them from attacks and damage with strong API verification, policies, and monitoring. API security should be a top priority for organizations in 2023 and beyond.

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