Note: This is a part of our API Security series where we solve common developer queries in detail with how-to guides, common examples, code snippets and a ready to use security checklist. Feel free to check other articles on topics such as authentication methods, rate limiting, API monitoring and more.
Using third-party APIs - unified API providers, workflow automation tools, and integration platforms - is standard practice for B2B SaaS products. But every third-party API you integrate becomes part of your security perimeter. A provider's breach can be your breach. Their compliance failures can be your audit findings.
This guide covers the specific security criteria to evaluate before integrating any third-party API provider, the questions to ask, and the risk mitigation practices to implement once you do.
Third-Party API Security Evaluation Checklist
Before walking through each criterion in detail, here is the full checklist for quick reference. Use this when evaluating any new API provider.
How to evaluate third-party APIs
Before integrating a third-party API into your system; you should ensure they're trustworthy and won't compromise your security. Here’s what you need to ensure:
1. Research the Provider's Security Track Record
Start with publicly available information. Search for the provider's name alongside "security breach", "data incident", or "CVE". Review their security page, trust centre, or compliance documentation. Check whether they have disclosed past incidents and, if so, how they handled them — the quality of incident response matters as much as the absence of incidents.
Specific things to look for:
- A dedicated
/securitypage with verifiable details (not just marketing language) - Published SOC2 or ISO27001 audit reports (or summaries) from the last 12 months
- Named security contacts or a responsible disclosure program
- A bug bounty program - providers that run one take external security feedback seriously
Note: Knit is one of the only unified API in the market today that does not store a copy of your end user’s data thus ensuring the maximum security while fetching and syncing data. Learn more
2. Audit the Security Documentation
A provider with serious security practices documents them thoroughly. Look for:
- Authentication methods supported (OAuth 2.0, API key, JWT — and whether each can be scoped)
- Explicit TLS version (TLS 1.2 minimum; TLS 1.3 preferred)
- Encryption standards for data at rest (AES-256 is the current standard)
- Data retention and deletion policies — how long does the provider keep your API request/response data?
- Whether their documentation is up to date, version-controlled, and reflects the current API
Red flags: vague claims like "we use industry-standard encryption" without specifics, or security documentation that has not been updated in over a year.
3. Run Security Testing Before Production
Do not wait until after integration to assess security. Before going live:
- OWASP API Security Top 10: Use the OWASP API Security Top 10 (updated 2023) as a baseline. The top risks - Broken Object Level Authorization, Broken Authentication, Unrestricted Resource Consumption, and others - apply to any API you consume as well as ones you build. Verify the provider has addressed the common categories.
- Penetration testing: If you handle sensitive data (employee records, financial data, health records), require that the provider shares results of their most recent third-party pen test. At minimum, ask when the last test was performed and by which firm.
- Vulnerability assessment: Run automated scanning against the API's test/sandbox environment before production integration. Tools like OWASP ZAP can surface common issues.
4. Check compliance
Compliance certifications are evidence of third-party audited security controls. The certifications that matter for B2B SaaS integrations:
- SOC2 Type II: The most important certification for US B2B vendors. Type II means auditors tested controls over a period of time (typically 6–12 months) - not just a point-in-time snapshot. Always ask for Type II, not Type I.
- ISO27001: International information security management standard. Required or expected by many enterprise customers outside the US.
- GDPR compliance (Article 28): If you process EU personal data, your provider must be a compliant data processor under Article 28. Ask for their Data Processing Agreement (DPA).
- PCI DSS: Required if payment card data flows through the API.
- HIPAA: Required if protected health information (PHI) flows through the API. Not all providers offer this - verify explicitly.
Ask for the actual certificates, not just a checkbox on a webpage. Certificates include issuance dates and scope - both matter.
5. Assess authentication and authorization protocols
Weak authentication in a third-party API is a direct attack surface. Evaluate:
- Supported auth methods: OAuth 2.0 with short-lived tokens is the most secure standard for third-party integrations. Long-lived static API keys with no expiry are a risk.
- Token scoping: Can you issue an API key scoped to only the specific resources you need (read-only employee data, specific CRM objects)? Least-privilege access at the token level limits blast radius if a key is compromised.
- Key rotation: Does the provider support — or enforce — key rotation? Keys that cannot be rotated without re-configuration are a maintenance risk.
- MFA for the admin console: Even if your integration uses API keys, does the provider's dashboard require MFA? A compromised admin account can regenerate all your keys.
6. Check data encryption methods
Verify both channels of encryption:
- In transit: HTTPS using TLS 1.2 minimum, TLS 1.3 preferred. Ask which TLS version is used and whether older versions (TLS 1.0/1.1) are disabled.
- At rest: AES-256 is the current standard for data stored by the provider. Ask explicitly what is stored and for how long — some providers store API request and response payloads for logging purposes; understand what that includes.
- Key management: Where are encryption keys stored? Are they rotated? Is there hardware security module (HSM) usage for sensitive operations?
7. Consider rate limiting practices
Rate limiting protects both you and the provider from abuse and denial-of-service conditions. Ask:
- What rate limits apply to your tier and specific endpoints?
- Are limits enforced per API key, per IP, or per account?
- What happens when a limit is hit — does the provider return a 429 with a Retry-After header? (This is standard and allows graceful handling.)
- Does the provider have DDoS mitigation at the infrastructure level?
If a provider has no rate limiting at all, that is a reliability and security risk — it means a bug in your integration code could spike your spend and potentially affect other customers on shared infrastructure.
8. Review incident response plan
A security incident with your provider is a matter of when, not if. Before integrating:
- Ask for their incident response procedure in writing
- Understand the breach notification timeline - how quickly are customers notified after a confirmed incident? GDPR requires notification within 72 hours for EU data breaches
- Understand what forensic information they retain and can share post-incident
- Verify they have a named security contact or a security disclosure email address
Risk Mitigation After Integration
Even after a thorough evaluation, implement these controls on your side:
API gateway as intermediary: Route all third-party API calls through an internal API gateway or proxy. This lets you add request logging, rate limiting, and authentication enforcement that supplements the provider's own controls.
Credential management: Store API keys in a secrets manager (HashiCorp Vault, AWS Secrets Manager, GCP Secret Manager) — never in code or environment variables in plaintext. Implement automated rotation wherever the provider supports it.
Data validation on ingress: Validate and sanitize all data received from third-party APIs before processing it. Do not assume that data from a trusted provider is free of injection payloads or malformed structures.
Continuous monitoring: Log all outbound API calls to third-party providers — endpoint, request size, response code, response time. Alert on anomalous patterns: unexpected data volumes, unusual error rates, calls to endpoints your integration does not normally use.
Dependency and supply chain monitoring: Use software composition analysis (SCA) tools to track the provider's client SDK if you use one. Known vulnerabilities in third-party SDKs (CVEs) can become your vulnerabilities if you do not update.
Fallback and graceful degradation: Plan for provider outages. Implement circuit breakers and fallback logic so that a third-party API failure degrades gracefully rather than propagating as an error through your product.
Regular access reviews: Audit which API keys are active quarterly. Revoke any key that is no longer in use.
How Knit Approaches Third-Party API Security
If you are evaluating Knit as a unified API provider, here is the relevant security posture:
Pass-through architecture: Knit does not store or copy your end users' data. When your application calls Knit to fetch employee records, CRM contacts, or financial data, the request flows through Knit to the source system and the response flows directly back. No data is persisted in Knit's infrastructure between API calls.
Encryption: All data in transit is encrypted with TLS 1.3. Data at rest uses AES-256. PII fields receive additional app-level encryption.
Certifications: Knit is SOC2 Type II certified, GDPR compliant (with a Data Processing Agreement available), and ISO27001 certified.
Access scoping: Knit MCP Servers and API credentials can be scoped to specific apps and specific tools — your integration only accesses what you explicitly configure.
Take your API security to the next level
If you are looking for a unified API provider that takes API and data security seriously, you can try Knit. It doesn’t store any of your user data and uses the latest tools to stay on top of any potential issues while complying with security standards such as SOC2, GDPR, and ISO27001.
Get your API keys or talk to our experts to discuss your customization needs
FAQs
What are the most important certifications to require from a third-party API provider?
Knit holds SOC2 Type II, GDPR (Article 28), and ISO27001 certifications — the three most commonly required by enterprise buyers for B2B SaaS integrations. For US customers, SOC2 Type II is the baseline. For EU data processing, a GDPR-compliant DPA is required. For international enterprise deals, ISO27001 is often expected. Always verify Type II for SOC2 — Type I only verifies controls exist at a point in time, not that they work continuously. Ask for the actual certificate with issuance date, not a checkbox.
What is the OWASP API Security Top 10 and why does it matter for evaluating providers?
The OWASP API Security Top 10 is the industry-standard framework for API security risks, maintained by the Open Web Application Security Project and updated in 2023. The top risks include Broken Object Level Authorization (BOLA), Broken Authentication, Broken Object Property Level Authorization, Unrestricted Resource Consumption, and Broken Function Level Authorization. When evaluating a provider, asking whether their security practices address the OWASP Top 10 is a fast way to assess maturity — providers with serious security programs will know the framework and can explain their controls.
How do I check if a third-party API is using strong encryption?
Check for HTTPS enforcement on all endpoints (HTTP should redirect to HTTPS, not just work alongside it). Ask explicitly which TLS version is used — TLS 1.3 is the current standard; TLS 1.0 and 1.1 have known vulnerabilities and should be disabled. For data at rest, AES-256 is the current standard. Ask what is stored and for how long — providers that log API request and response payloads indefinitely have a larger encryption surface area than those that do not store payload data.
What should I look for in a provider's incident response plan?
Key elements: a documented notification timeline (GDPR requires 72 hours for EU data breaches; many enterprise contracts require 24–48 hours), a named security contact or security@domain.com address, a responsible disclosure program for external researchers, and a record of how past incidents were handled. Ask whether the provider has experienced a breach — and if so, how they notified customers. The quality of disclosure often matters more than the incident itself.
Should I require penetration testing results from my API provider?
For any integration that handles personal data, financial data, or sensitive business records, yes. Ask when the last third-party penetration test was conducted and by which firm. Annual pen tests by an accredited third party are the minimum bar for enterprise-grade providers. Some providers publish pen test executive summaries or will share them under NDA. If a provider cannot confirm they have had a third-party pen test in the last 12 months, treat that as a significant risk signal.
What are the three pillars of API security?
The three pillars of API security are governance, testing, and continuous validation. Governance covers defining security policies, access controls, and compliance requirements. Testing covers penetration testing, vulnerability assessments, and running API calls against the OWASP Top 10 attack patterns. Continuous validation covers runtime monitoring, anomaly detection, and alerting on unexpected API behavior in production. When evaluating a third-party provider, you are assessing all three pillars — not just whether they have certifications, but whether they test continuously and have operational controls in place.
What is the difference between SOC2 Type I and SOC2 Type II?
SOC2 Type I is a point-in-time assessment: auditors verify that the right security controls exist on a specific date. SOC2 Type II is an audit over a period (typically 6–12 months): auditors verify that the controls are operating effectively over time. Type II is substantially stronger evidence. When a provider says "we're SOC2 compliant," always ask which type. Most enterprise procurement checklists and enterprise contracts require Type II. Ask for the certificate, which shows the audit period covered.
How does Knit's pass-through architecture reduce third-party API security risk?
Knit uses a pass-through architecture — your end users' data is not stored or copied within Knit's infrastructure. When your application calls Knit to fetch an employee record or CRM contact, the data flows from the source system through Knit directly to your application and is not persisted between calls. This significantly reduces the data breach exposure surface compared to providers that store normalized copies of your customers' data. Knit is SOC2 Type II certified, GDPR compliant with a Data Processing Agreement, and ISO27001 certified. All data in transit uses TLS 1.3; data at rest uses AES-256.
