IT Insights

Modern businesses depend on third-party apps and APIs for everything from customer service and analytics to cloud storage and security. That convenience comes with a catch: every new integration increases your attack surface. According to the 2025 Global Third-Party Breach Report, 35.5% of recorded breaches in 2024 were linked to third-party vulnerabilities. In other words, your security can be only as strong as the apps and vendors you plug into your environment.

The good news is that these risks can be managed. With a structured approach to third-party API security, you can take advantage of integrations without blindly trusting them. This article walks through the hidden dangers of third-party integrations and provides a practical checklist to help you vet any external app or API before you connect it to your systems.

Why Third-Party Apps Are Essential in Modern Business

Very few organizations build every tool in-house. Instead, they rely on third-party apps and APIs to handle payments, customer support, analytics, email automation, chatbots, data pipelines, and more. That approach lets your team move faster, control costs, and tap into capabilities that would take months—or years—to develop internally.

Done well, a modern integration strategy allows you to:

• Boost efficiency by connecting systems that used to be isolated
• Automate manual workflows and reduce repetitive tasks
• Improve reporting, dashboards, and business insights
• Enhance the customer experience with better tools and responsiveness

The challenge is that every one of those integrations also becomes a potential doorway into your environment. That is where a disciplined approach to third-party API security comes in.

What Are the Hidden Risks of Integrating Third-Party Apps?

When you connect an external app to your systems, you are extending trust to that vendor, their infrastructure, and often their own supply chain. The risks are not just technical—they span security, privacy, compliance, operations, and financial exposure.

Security Risks

Third-party integrations can introduce unexpected security weaknesses. A plugin that looks harmless may contain vulnerabilities, misconfigurations, or even malicious code. If a vendor gets compromised, attackers can use that integration as a pivot point to access your data and systems.

Common security concerns include:

• Weak or outdated authentication and authorization controls
• Insecure API endpoints that can be abused for data extraction or account takeover
• Overly broad permissions that grant more access than necessary
• Poor logging and monitoring, making it hard to spot suspicious activity

Guidance such as the OWASP API Security Top 10 highlights just how frequently APIs are targeted as a path into sensitive systems. Robust third-party API security is not optional—it is a core part of your overall security posture.

Privacy and Compliance Risks

Even if you have strong internal controls, a compromised or poorly governed third-party app can still put regulated or sensitive data at risk. Vendors may gain access to customer information, financial records, or internal documents and use the data in ways you did not intend—for example, storing it in other regions, sharing it with additional partners, or analyzing it for secondary purposes.

Misuse or mishandling of data can lead to violations of privacy and data protection laws, contractual breaches, cyber insurance headaches, and reputational damage. For organizations with HIPAA, FTC Safeguards, GLBA, or similar obligations, unmanaged vendor risk is a direct compliance risk.

Operational and Financial Risks

Integrations affect how your business runs day to day. If a third-party API fails or slows down, it can disrupt workflows, delay transactions, or knock out key capabilities like authentication or billing. A poorly designed integration might also generate unexpected usage charges or resource consumption.

In more serious situations, attackers may exploit weak credentials or insecure endpoints to conduct fraud, push unauthorized transactions, or lock you out of your own systems. The direct and indirect financial impact—from downtime, incident response, legal costs, and lost trust—can be significant.

What to Review Before Integrating a Third-Party API

Before you connect any external app or service, take time to vet it. The following checklist gives you a structured way to evaluate third-party API security and decide whether a vendor deserves a place in your environment.

1. Check Security Credentials and Certifications: Confirm that the provider has recognized security credentials such as ISO 27001 or SOC 2, and that they align with frameworks like NIST. Ask for recent audit reports, penetration tests, or third-party assessments. A mature vendor will be prepared to show you how they identify and remediate vulnerabilities.
2. Confirm Data Encryption: Review the vendor’s documentation and security statements to understand how they encrypt data in transit and at rest. Look for strong, modern protocols like TLS 1.3 (or equivalent) for network communications and robust encryption standards for stored data. Proper encryption is a foundational part of third-party API security.
3. Review Authentication and Access Controls: Ensure the app uses modern identity standards such as OAuth 2.0, OpenID Connect, or signed JWT tokens. Verify that it supports the principle of least privilege, so users and systems only receive the access they actually need. Short-lived tokens, credential rotation, and granular role-based access controls are all strong signs of a mature security posture.
4. Check Monitoring and Threat Detection: Ask how the vendor monitors their platform for suspicious activity and emerging threats. Do they have centralized logging, security alerts, and an incident response process? Once integrated, you should maintain your own logs of API calls and administrative actions so you can detect anomalies or abuse tied to that integration.
5. Verify Versioning and Deprecation Policies: Reliable vendors manage their APIs over time. Confirm that they clearly document versions, maintain backward compatibility where possible, and communicate deprecation timelines in advance. A well-defined versioning strategy helps you avoid sudden breakage and gives you time to plan upgrades securely.
6. Understand Rate Limits and Quotas: Proper rate limits protect both you and the provider from abuse, denial-of-service scenarios, and runaway scripts. Confirm that the vendor supports reasonable request quotas and throttling, and make sure your own applications respect those limits. Thoughtful rate limiting is another piece of a resilient third-party API security strategy.
7. Clarify Contract Terms and Right to Audit: Your contracts and data processing agreements should spell out security expectations, data handling rules, and your right to request documentation or evidence of controls. Where appropriate, include language that allows you to review their security practices and requires timely remediation of identified issues.
8. Know Data Location and Jurisdiction: Verify where your data will be stored and processed, and which legal jurisdictions apply. This is especially important if you operate in regulated industries or serve customers in multiple regions. Cross-border data transfers and unclear data residency can introduce unexpected compliance and legal obligations.
9. Ask About Failover and Resilience: Understand how the vendor designs for uptime and recovery. Do they have redundancy, backup strategies, and disaster recovery plans? What happens if one of their regions or services goes down? Knowing their failover model helps you design your own integrations so that a vendor outage does not bring your entire workflow to a halt.
10. Check Dependencies and Supply Chain: Vendors often rely on other platforms, libraries, and open-source components. Ask for transparency into key dependencies, especially those that could impact security or availability. High-profile supply chain issues have shown that a weakness in one component can ripple outward into many organizations.

Vet Your Integrations Today

No technology is completely risk-free, and that includes third-party apps and APIs. The goal is not to eliminate integrations—it is to make sure they are properly evaluated, documented, and monitored over time. Treat vendor vetting as an ongoing process rather than a one-time checklist you complete at onboarding and forget.

Continuous monitoring, periodic reassessments, and clear offboarding procedures (for when you stop using a vendor) should all be part of your third-party API security plan. As new regulations emerge and your own environment evolves, your vendor list and risk posture will change too.

If you want to strengthen how you evaluate third-party integrations and align that process with your broader compliance and security obligations, you do not have to do it alone. ParJenn Technologies offers compliance services that include vendor oversight, risk assessments, and documentation to help you prove that you are managing third-party risk the right way.

For organizations that need deeper visibility into threats and suspicious activity across their environment, our managed detection and response services provide 24/7 monitoring, investigation, and response capabilities. Together, we can help you tighten your integrations, reduce vendor-driven exposure, and ensure every tool in your stack works for you—not against you.