The market for API Management is estimated to become $13.7 billion by 2027 from $4.5 billion in 2022 with a CAGR of 25.1%, with retail being one of the top 3 sectors to deploy APIs extensively.
APIs have transformed innovation and value delivery in retail by enabling businesses to open their enterprise capabilities to a broader ecosystem. By sharing data and functionalities, retail chains can build newer partnerships, create innovative business models and more refined personalized customer experiences and recommendations, and improve customer satisfaction and loyalty. Additionally, increasing demand for automation, digitalization and proliferation of cloud and mobile devices have increased API adoption.
How APIs Have Revolutionized Retail
In 2002, much before APIs became commonplace in retail, Jeff Bezos identified its potential in breaking and driving business revenue and released the now-famous “Bezos API Mandate” to enable data and functionality sharing internally and externally through service interfaces. This was just one of the many disruptive use cases of APIs showcasing how businesses and teams shared information and built transparency.
From improving operational efficiency to reducing time to build newer revenue streams to cutting costs and forging profitable partnerships faster, APIs have significantly impacted how retail businesses enhance operational agility, augment the bottom line, and design more unified and refined customer experiences.
As per an article on API product mindset published on Google Cloud Apigee, “An API-driven business may move far faster than a traditional enterprise; after all, one of the advantages of implementing an API management layer is to decouple partner onboarding and new, rapidly evolving apps from relatively lethargic and brittle enterprise systems.”
But like any other emerging technology, APIs have also caught the attention of cybercriminals, who have been studying and exploiting them to commit even more massive breaches and bigger attacks.
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Broadened Surface Area of Attacks for Retail
As per the 2023 Holiday Season API Report, retail fraud increased by almost 700% last holiday season, with attacks ranging from gift card fraud, scrapping, and loyalty card fraud to payment card fraud. The report highlighted advanced techniques (like automated line jumpers) and meticulous planning that were deployed to exploit the vulnerabilities that digitalization, APIs, and peak season traffic present.
As much as APIs present an enterprising opportunity for retail players to augment their offerings, they also pose enhanced security risks because of
- The increased interconnection and unification of systems using an omnichannel strategy
- A more significant number of authentication endpoints and authorization access points
- Greater chances of improper access controls and misconfigurations
- Larger amount of customer data across the entire network
But not all is so gloomy with API adoption. With the proper testing approach and comprehensive implementation, many cyber risks can be anticipated and mitigated quickly.
How API Security Testing Can Help Mitigate These Cyber Risks
How does API security testing translate to tangible risk mitigation? Let us take an example of some of the common vulnerabilities:
- Injection attacks: A seemingly harmless user input like “John’s Bakery” could, through SQL injection, manipulate database queries and steal customer data. API security testing simulates such inputs, exposing weak validation controls and preventing real-world exploits.
- Broken authentication and authorization: APIs relying solely on basic authentication or poorly configured access controls become breeding grounds for unauthorized access. Testing uncovers these gaps, ensuring only authorized users interact with sensitive data.
- Insecure data exposure: Sensitive information like financial details or personally identifiable data (PII) should be encrypted at rest and in transit. API security testing identifies unencrypted data flows, prompting developers to implement appropriate encryption protocols.
The benefits extend beyond vulnerability detection. Proactive testing fosters a shift-left security mindset, integrating security considerations into the development lifecycle. This leads to faster remediation, detecting vulnerabilities before they reach production and beyond. Additionally, continuous monitoring ensures APIs remain secure even as threat landscapes evolve.
Recent research suggests that there could be a 996% increase in API attacks by the end of this decade. The economic consequences (i.e., cost of cyber security breach) are also estimated to increase by up to 95% from $ 6.1 million in 2023 to $ 14.5 million by 2030. So, if you are planning to ramp up your API strategies, implement a thorough API testing protocol to make the most of this innovative business value creator.