What is Managed File Transfer (MFT)?

Managed File Transfer (MFT) is a software solution that sim­pli­fies internal and external data transfers for busi­nesses. Thanks to MFT, transfer processes can be seam­lessly automated, con­figured, and managed. In doing so, a high level of trans­par­ency and safety is guar­an­teed. Find out what the ad­vant­ages and dis­ad­vant­ages of MFT are and where it’s used.

How does MFT work?

Managed File Transfer is available as an on-premises ap­plic­a­tion or as a cloud service (SaaS). This dis­tin­guishes it from pure network protocols like File Transfer Protocol (FTP) or SSH Transfer Protocol (SFTP). First, the files are uploaded and encrypted in the MFT system. Here, secure protocols like FTPS, SFTP, or HTTPS are used as con­nec­tions. These transmit the data to the target system or to other ap­plic­a­tions. All activ­it­ies are logged to ensure that they meet com­pli­ance re­quire­ments. Archiving also sim­pli­fies sub­sequent follow-up checks.

The in­fograph­ic shows how data is exchanged between internal and external systems with MFT:

What are the ad­vant­ages of MFT?

Advantage 1: Safety

MFT solutions usually include cryp­to­graph­ic measures like end-to-end en­cryp­tion (E2EE) to protect data during transfer and when idle. This makes MFT more reliable and involves fewer risks than FTP. Regular security checks and real-time mon­it­or­ing also prevent costly data breaches.

Advantage 2: Ef­fi­ciency

Data is exchanged securely and ef­fi­ciently between systems and locations. This includes large data volumes. In addition, Managed File Transfer supports ex­ten­sions for a wide range of platforms, mobile devices, databases, and ap­plic­a­tions like ERP and CRM.

Advantage 3: Com­pli­ance

Or­gan­isa­tions can configure MFT to meet stringent security standards. This includes reg­u­lat­ory re­quire­ments like the General Data Pro­tec­tion Reg­u­la­tion (GDPR), Payment Card Industry Data Security Standards (PCI DSS), Basel II, Health Insurance Port­ab­il­ity and Ac­count­ab­il­ity Act (HIPAA), and the Sarbanes-Oxley Act (SOX).

Advantage 4: Trans­par­ency

With the high level of trans­par­ency provided by logging processes, risks can be better assessed. Errors in data transfers can be corrected more quickly or prevented al­to­geth­er.

What are the dis­ad­vant­ages of MFT?

Dis­ad­vant­age 1: Cost

MFT is typically more expensive than setting up an FTP server, since spe­cial­ised hardware and software com­pon­ents are required for the extensive func­tion­al­it­ies.

Dis­ad­vant­age 2: Com­plex­ity

As a software platform, MFT is more complex to implement and requires a certain technical un­der­stand­ing. Employees must first be trained in how the system works.

Dis­ad­vant­age 3: Main­ten­ance

Local MFT systems need regular main­ten­ance to remain secure. This is often resource intensive and time consuming. But Managed File Transfer is also available as SaaS, where updates and main­ten­ance are handled auto­mat­ic­ally by the provider.

Where is MFT typically used?

Managed File Transfer is par­tic­u­larly suited for companies that need to manage and transfer large amounts of sensitive data. MFT is fre­quently used in these areas:

• Financial services: MFT can be used to securely transmit sensitive financial in­form­a­tion like account details, trans­ac­tions, or credit card data.
• Health­care: Hospitals or doctors’ offices can use MFT to manage and transmit elec­tron­ic patient records, lab results, or X-rays according to security standards.
• Gov­ern­ment agencies: Gov­ern­ment entities benefit from Managed File Transfer when trans­mit­ting secret and clas­si­fied in­form­a­tion like tax or customs data.
• E-commerce: E-commerce often generates high volumes of data like orders, invoices, and trans­ac­tion data that can be ef­fi­ciently logged and exchanged between companies and customers with MFT.