Digital transformation in the financial services sector has led to the widespread adoption of APIs, which offer seamless user experiences and facilitate data sharing between financial institutions, fintech companies, and third-party service providers. While this innovation has created opportunities for open banking and new digital payment systems, it has also introduced significant security challenges, particularly concerning data breaches and unauthorized access. API management solutions are crucial for ensuring financial compliance and security by enabling institutions to oversee their API connections, standardize practices, and maintain data governance and privacy regulations. These solutions address risks like reduced observability and unauthorized access, helping financial institutions meet compliance standards such as GDPR, PCI DSS, and others. API management tools also foster scalability and consistency, reducing inefficiencies and enhancing consumer trust. As financial institutions continue to navigate technological advancements like AI and microservices, robust API management frameworks will be essential in maintaining compliance and enabling secure, innovative solutions that support organizational growth.