Open banking APIs allow financial institutions and authorised third-party providers to exchange account information, initiate payments, and deliver connected financial services.
From an engineering perspective, this creates an environment involving API gateways, authentication services, payment platforms, cloud infrastructure, databases, external applications, and multiple supplier connections.
The security challenge is not limited to protecting an endpoint. It involves managing identities, permissions, communication channels, software vulnerabilities, operational dependencies, and security events across the entire environment.
ISO/IEC 27001 can provide a structured information security management framework for addressing these risks.
1. Understanding the PSD3 Context
PSD3 is the proposed successor to PSD2 under the European Union's payment services reform. The proposed framework addresses payment security, operational risks, authentication, fraud prevention, and incident management.
Organisations should monitor the legislative process and distinguish proposed requirements from obligations already applicable to their activities.
For engineering and security teams, the practical requirement is to understand which payment services, APIs, systems, and data flows are relevant to their regulatory responsibilities.
2. Common Open Banking API Security Risks
Some common weaknesses in API environments include:
- Broken authentication and inadequate identity verification
- Broken object-level or function-level authorisation
- Excessive permissions for applications and services
- Exposed access tokens and credentials
- Insecure transport configurations
- Injection and input validation weaknesses
- Inadequate rate limiting and traffic controls
- Vulnerable third-party dependencies
- Insufficient logging and monitoring
- Misconfigured cloud and network resources
A single weakness can affect more than the application where it originates. Connected systems may share credentials, permissions, data, or infrastructure.
3. Applying ISO 27001 Controls
ISO/IEC 27001:2022 provides requirements for an Information Security Management System. Its Annex A controls can be considered when selecting safeguards for identified risks.
Identity and access management
Define access requirements for users, applications, services, and administrators. Review privileges regularly and protect authentication information throughout its lifecycle.
Cryptography
Use appropriate cryptographic protection for sensitive information in transit and, where applicable, at rest. Manage keys, certificates, and related information through controlled processes.
Network security
Use segmentation, restricted connectivity, secure architecture, and appropriate traffic controls to reduce unnecessary exposure between internal and external systems.
Secure development
Integrate security into the software development lifecycle. Use code reviews, security testing, vulnerability management, secure configuration, and controlled changes.
Logging and monitoring
Capture relevant authentication, access, administrative, and API activity. Protect logs against unauthorised modification and monitor for unusual behaviour.
Supplier security
Assess external providers according to their access, data exposure, operational importance, and security responsibilities.
Incident management
Define processes for detecting, investigating, responding to, and recovering from security incidents affecting APIs and connected payment services.
4. Mapping API Risks to the ISMS
A useful approach is to connect technical risks with organisational risk assessment and treatment processes.
For example:
| API security risk | Relevant security focus |
|---|---|
| Stolen credentials | Identity and access management |
| Exposed financial data | Cryptography and access restrictions |
| Insecure API endpoints | Secure development and vulnerability management |
| Suspicious API traffic | Logging and monitoring |
| Compromised suppliers | Supplier relationship security |
| Payment service disruption | Incident management and business continuity |
This is an illustrative mapping, not a universal compliance checklist. The actual control selection should reflect the organisation's risk assessment and ISMS scope.
5. Managing the Statement of Applicability
The Statement of Applicability records selected controls and explains their applicability. For organisations with extensive API environments, it can help connect identified risks, selected controls, and information security objectives.
It should reflect the actual environment rather than simply listing every possible control.
6. Certification and Regulatory Compliance
ISO 27001 certification demonstrates conformity of a defined ISMS scope with the standard. It does not automatically establish PSD3 compliance.
Organisations should separately identify applicable legal requirements and evaluate whether their security controls address those obligations.
A structured ISO 27001 information security management approach can help connect API security engineering with organisational risk management, governance, and continual improvement.
Top comments (0)