India's fintech sector is at the heart of the country's digital revolution, projected to reach $990 billion by 2032. With 900 million internet users and 500 million smartphone adopters, fintech products have become a daily necessity for hundreds of millions of Indians. In 2025 alone, digital payments will process over 130 billion transactions, with UPI alone handling 13 billion monthly transactions worth ₹130+ trillion ($1.6 trillion) annually.
At the core of this explosive growth are APIs - Application Programming Interfaces. APIs are the digital bridges that allow fintech platforms, banks, payment processors, and third-party apps to communicate and exchange data seamlessly. They power everything from instant payments and real-time account aggregation to identity verification and cross-border remittances. APIs enable fintechs to offer a unified, personalized customer experience, accelerate time-to-market for new products, and foster innovative partnerships through open banking and embedded finance.
Yet, with great power comes great risk. APIs are also the most critical, and vulnerable, component of fintech infrastructure. Every API call that enables a payment, a loan, or a KYC check is a potential entry point for cybercriminals. The very features that make APIs indispensable—open access, real-time data sharing, and interoperability—also expose fintechs to a growing array of threats.
Why APIs Are Vulnerable: The Threat Landscape
APIs are the new frontier for cyberattacks. Their widespread adoption, public exposure, and the sensitive data they handle make them prime targets. Here's why APIs are so vulnerable:
- Complex Architectures: Modern fintechs rely on hundreds of APIs, both internal and third-party. Many of these are undocumented or "shadow APIs", creating security blind spots.
- Sensitive Data Exposure: APIs often transmit sensitive data such as personally identifiable information (PII), payment details, and credit scores. A single breach can expose millions of records.
- Insecure Design and Misconfigurations: Poorly designed APIs, such as those lacking proper authentication, authorization, or rate limiting, are easy prey for attackers.
- Evolving Attack Vectors: Cybercriminals use automated tools, AI, and sophisticated techniques like injection attacks, credential stuffing, and man-in-the-middle attacks to exploit APIs at scale.
API Security: The Silent Threat to Fintech's $1.6 Trillion Ecosystem
APIs enable critical services like UPI, digital wallets, and cross-border payments. Yet, poor API governance has led to catastrophic breaches:
In 2020, Juspay, a popular Indian payment processor, suffered a breach where attackers accessed a database containing masked card data and phone numbers of over 35 million users via an insecure API. The root cause of the unauthorized access that led to the Juspay data breach was found to be an unrecycled access key that was exploited. Not only did the company lose trust from users, but also the ecommerce, travel and other giants it was partnered with.
In 2022, a data breach in BharatPe systems results in leak of user names, hashed passwords, mobile phone numbers, UPI IDs, and email addresses. Additionally, transaction data and API keys of online bill payment facilitators were also leaked. The threat actor was also able to access API configurations database to manipulate discounts and commissions for finance plans from BharatPe.
One of the largest data breaches in the world occurred when the Aadhar Database was leaked online, exposing sensitive information of millions of citizens.
Based on estimates, only 19% of companies use an automated scanner to manage their API security, with 45% using manual penetration testing and more than a third (36%) not testing their APIs.
According to the recent whitepaper published by CERTin, there was a 62 percent increase in the number of API attacks on the Indian financial sector as on June 30, 2023, when compared to 2022. The average cost of a breach is estimated to be $4.45M. 57% attacks happen due to security misconfigurations while almost 34% are from DDoS.
Regulators Are Taking Note, and Compliance is Not Optional
The recent SEBI Cybersecurity and Cyber Resilience Framework (CSCRF) for SEBI Regulated Entities (REs) underscores this urgency, making robust API security non-negotiable in 2025 and beyond. The CSCRF explicitly mandates that all RE, including fintechs, mutual funds, brokerages, and more, must implement strong API security controls. This includes:
- Authentication and Authorization: All APIs must have proper authentication and authorization mechanisms, including rate limiting and throttling to prevent abuse.
- Continuous Monitoring: APIs are included in the scope of continuous security monitoring through Security Operations Centres (SOCs).
- Compliance and Audits: Regular audits (VAPT, cyber audits) must cover API endpoints, and findings must be reported and remediated promptly.
- Local Processing: The CSCRF requires that all regulatory data must be stored and processed within India, and APIs must be secured to ensure this compliance.
SEBI is not the only mandate. Other mandates from regulatory authorities include:
- RBI Guidelines: The Reserve Bank of India (RBI) has issued guidelines for fintechs and banks, emphasizing API security as part of their cybersecurity frameworks. For example, the RBI's Master Direction on IT Governance, Risk, and Controls mandates secure API management for all digital banking services.
- MeitY and CERT-In Directives: The Ministry of Electronics and Information Technology (MeitY) and CERT-In have issued advisories requiring organizations to secure their APIs and report breaches within strict timelines.
- DPDPA 2023: The Digital Personal Data Protection Act mandates strict controls over personal data, with APIs being a critical vector for data access and transfer.
Breaches can result in financial, reputational and operational losses. Non-compliance with frameworks like CSCRF, RBI guidelines, or DPDPA can result in hefty fines and operational restrictions. Customers entrust fintech companies with their sensitive financial information. A breach can shatter this trust, leading to customer attrition and reluctance to engage with the company's services in the future. Finally, when such a breach occurs, stall in operations leads to real dollars loss in business.
Rakuten SixthSense: Frictionless API Security for Scaling Fintechs
For fintech C-suite leaders, balancing rapid growth with robust security is a constant challenge. Rakuten SixthSense eliminates this trade-off with:
- Map your API infrastructure: Discover shadow, zombie and vulnerable APIs and prioritise them automatically.
- Real-Time API Monitoring: Track API calls in real time and block threats like IDOR or SQLi before they escalate.
- Automated Compliance: Pre-built templates for SEBI CSCRF, RBI, and DPDPA reduce audit prep by 200+ hours/month.
- Zero-Trust Architecture: Enforce MFA, RBAC, and tokenization across third-party integrations.
Rakuten SixthSense isn't just a vendor—it's your partner in turning API security into a competitive advantage. Secure your fintech's future. Book a demo to see how Rakuten SixthSense protects 800,000+ API calls daily.