As digital transformation continues to permeate the financial ecosystem in the Middle East, where countries like the UAE, Saudi Arabia, and Bahrain are leading innovation in digital banking services, a promising trend has emerged: Banks are now allocating budget items for Application Programming Interfaces (API) security or implementing organization-wide mandates.
And for good reason. APIs are the cornerstone of modern banking architecture, enabling everything from mobile banking applications to open banking initiatives; unfortunately, they are also the most exploited attack surface. For instance, it only takes one data breach, or a persistent fraud attack resulting from an API vulnerability to damage a bank’s reputation and get the attention of industry regulators.
In fact, 70 percent of internet-facing applications rely on APIs, with threat actors increasingly targeting this layer due to its expanding footprint and weak oversight. This growing reliance makes securing APIs not just a technical concern, but a strategic necessity for banks undergoing digital transformation.
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In addition to prioritizing dedicated budget allocations and adhering to evolving compliance mandates, financial institutions across the Middle East are increasingly embracing API-first strategies as part of their digital transformation efforts. While there is a growing awareness of the strategic importance of API security, many banks in the Middle East continue to face critical blind spots within their API ecosystems.
These blind spots often involve challenges such as identifying non-compliant APIs and uncovering specific security gaps within the infrastructure. Banks need to understand that these are not merely technical issues, rather they represent fundamental business risks. In other words, API security requires more than just financial resources; it demands a shift in security approaches.
Breaking the visibility gap
Traditional security models focused on protecting the perimeter and assumed that traffic inside the network could be trusted. APIs, however, expose internal systems by design, creating pathways that transcend traditional security boundaries. This architectural reality means that the same security approaches that worked for web applications don’t adequately protect API ecosystems.
There is also what is widely referred to as the “unknown unknown” dilemma — an organization cannot protect what it cannot see. Undocumented, outdated, or shadow APIs operate beyond security oversight, creating vulnerabilities that remain unaddressed despite allocated security budgets.
With this in mind, it appears that the most pressing challenge that banks in the Middle East face is developing comprehensive visibility into their API ecosystems. This requires a three-pronged approach. Firstly, banks must ensure that they undertake continuous discovery and inventory.
Rather than treating API documentation as a static document, banks need automated, continuous discovery processes that identify new, changed, or deprecated APIs in real-time. This dynamic inventory becomes the foundation for all security efforts.
Secondly, banks need to establish a risk-based classification system. Not all APIs carry equal risk. Those handling sensitive customer data or critical financial operations require heightened protection compared to those serving public information. Classification must be automated and risk-informed.
Thirdly, banks should approach API security equipped with the ability to do ‘behavior analysis’. Banks need to have a better understanding of how APIs behave under normal circumstances to detect anomalies that indicate potential attacks. This requires sophisticated monitoring that goes beyond simple traffic analysis.
Without these capabilities, even substantial budget allocations will fail to deliver adequate security outcomes. It’s like installing expensive security cameras that don’t actually record footage! And as threat complexity grows, banks must adopt detection systems that are equally intelligent — capable of analyzing behavior patterns and flagging anomalies in real time.
Standards and regulatory hurdles
Banks in the Middle East also face a complex regulatory environment that not only drives API security investments, but also create compliance challenges. Regional regulatory bodies increasingly recognize the importance of API security, with frameworks like the Central Bank of the UAE’s Information Security Regulations and the Saudi Arabian Monetary Authority’s Cyber Security Framework incorporating elements of API protection.
In addition, Middle Eastern banks with international operations must adhere to global standards like PSD2, GDPR, and the increasingly referenced FFIEC guidance on API security.
But while these regulations are necessary, they can sometimes drive a compliance-first rather than security-first approach. The distinction is subtle but significant: Compliance ensures meeting minimum standards, while true security requires continuous adaptation to evolving threats.
The most forward-thinking banks in the Middle East recognize that exceeding regulatory requirements, particularly regarding API visibility and protection, provides competitive advantages beyond mere compliance.
From detection to prevention
The path to a truly proactive API security system is to supplement a protection approach with a detection and prevention mindset. Detection involves implementing systems that can identify attacks in progress, while prevention means deploying proactive measures that stop attacks before they succeed. What is also important to realize is that the solution extends beyond the technology, it encompasses people and processes.
Towards this end, banks must establish clear ownership of API security, not just in broad terms, but through defined roles across departments. A growing best practice is appointing an ‘API Security Champion’ within development teams — someone who acts as the advocate and bridge between engineering, security, and risk management.
Ownership must span technical and non-technical teams, from development and operations to compliance and business units, ensuring API risks are addressed at every level. This leads us to our final point.
API security as business enabler
For Middle East banks to truly capitalize on their API security investments, they must also reframe the conversation. Rather than treating API security as a technical checkbox or compliance requirement, forward-thinking organizations position it as a business enabler that facilitates innovation, partnership, and customer trust. This shift requires executive leadership to understand that API security isn’t just about preventing breaches — it’s about creating the foundation for confident digital expansion.
When banks know their APIs are properly discovered, documented, monitored, and protected, they can move faster on initiatives like open banking, fintech partnerships, and innovative customer experiences. Middle East banks stand at a pivotal moment.
With proper execution of API security strategies that emphasize comprehensive visibility, risk-based protection, and proactive prevention, they can set global standards for secure digital innovation. The financial commitments have been made — now it’s time to ensure they translate to genuine security outcomes.
Mohammad Ismail is the vice president for EMEA at Cequence Security.
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