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The amount of data moving online increases exponentially everyday, with new uploads coming from every location in the world at every second. While some of this data is inconsequential, increasingly sensitive data, like patient history and financial statements, can cause devastating consequences for businesses and their customers.

Thankfully, there are several methods teams can use to encourage secure data transfer across online environments, including managed file transfer, MFT, and secure file transfer protocol, SFTP. Both of these strategies are useful but have differences to consider when comparing MFT vs SFTP for your team and business needs.

What is Managed File Transfer? 

Managed file transfer, or MFT is a process that securely and reliably shares files between multiple systems and organizations while providing auditing capabilities. Teams use MFT to move a high-volume of unstructured data and maintain file integrity, automation, end-to-end security, guaranteed delivery, reporting, and more. 

The managed file transfer protocol is essential for security exchanging a large quantity of sensitive data between systems, especially when transferring data between external partners and vendors. 

The MFT protocol comprises 4 main features: 

  1. Security
  2. Reliability 
  3. Auditing 
  4. Automation 

What is Secure File Transfer Protocol? 

SFTP, or secure file transfer protocol, provides an encrypted channel for secure data transfer between systems over a network.  SFTP encrypts both the commands and data sent between the client and SFTP server to protect sensitive data during transport.

SFTP runs over the Secure Shell (SSH) protocol and supports the full security and authentication capabilities of SSH. Also known as secure FTP, SFTP provides numerous security features that make it preferred to File Transfer Protocol, or FTP, when transferring sensitive data. FTP transfers files in clear text that can be intercepted by malicious actors.

Secure file transfer protocol, on the other hand, offers authentication functionality to ensure authorized access only for data transfer and file sharing. SFTP supports several user access authentication processes like User IDs, username/password combos, and public key authentication.

Teams use SFTP for file transfer initiatives between trading partners, to backup servers, and to automate file transfer activity through batch workflows.  

Pros and Cons of MFT vs SFTP

MFT and SFTP are both methods for file sharing and secure data exchange, but there are a number of differences that should be considered when deciding which protocol to use. 

Feature Set

When comparing the feature set of MFT vs SFTP, managed file transfer offers a range of additional features lacking in secure file transfer protocol. MFT offers workflow automation, monitoring, scheduling, and auditing, while SFTP is only used for secure data transfer. 


Managed file transfer also offers more robust security-related features including end-user authentication, audit trails, and user access controls. While also a secure option for file transfer activity, SFTP only offers encryption for data in transit. 

Ease of Use

Because of the additional features and security capabilities, MFT solutions can be more complicated to manage and take longer to learn because they require additional configuration. SFTP is easy to use and set up but limited in other areas. 


Because SFT is easy to use and set up, it can be limited in performance and scalability. Managed file transfer is designed to manage the exchange of large files between multiple systems and end-users. 

Ability to Integrate

Both SFTP and MFT can be integrated with other systems and workflows, but MFT solutions are more equipped to integrate with enterprise systems and complex end-to-end workflows. This makes managed file transfer a better option for automating file transfer activity and enchanting business processes. 

Use Cases for Managed File Transfer

While managed file transfer is used across industries and companies focused on securing sensitive data, there are some specialized use cases for MFT, including business with compliance requirements to adhere to, like healthcare providers. 


Managed file transfer is used often in the healthcare industry, with providers using MFT solutions to secure sensitive patient information like medical records and test results. MFT also enables healthcare providers to stay within HIPAA compliance regulations.

MFT can be used for file sharing between Electronic Healthcare Records (EHR) and Health Information Exchange (HIE) systems that store patient data, and can secure medical imaging files like X-rays, MRIs, and CT scans in transit.  Research institutions also use MFT to protect file transfer activity involving clinical trials and ensure compliance.  

Banking and Finance

Banking and finance is another industry involving the storage and transfer of extremely sensitive and valuable information like financial records, bank statements, and personal customer data. Financial institutions rely on MFT for secure file transfer activity between banks, third-party vendors, and trading partners. 

By encrypting the data and transferring it securely, banks can protect unauthorized user access. And if attacks do happen, managed file transfer can be employed to help with disaster recovery. MFT solutions provide data backup and recovery functionality so data can be restored in the event of a disaster.

Managed file transfer can also help financial institutions streamline business processes through automation of data exchange, and give them confidence they’re following compliance regulations for PCI DSS, HIPAA, GDPR, and SOX. 

Automate File Transfer with Redwood’s MFT Solution

Enterprise teams can confidently manage critical and sensitive data transfers to internal and external parties with ease using managed file transfer automation with Redwood. 

Teams can achieve automated file transfer workflows, enable secure file transfer for better data security, track and log all file transfer processes, and do all of this from anywhere to any location. Automation improves electronic data interchange (EDI) service levels and increases the overall functionality of the MFT platform. 

Automate end-to-end data pipelines while syncing file transfers with their related business processes. Create triggers to stop and start MFT workflows when an upload, download, or failure occurs, and ensure guaranteed delivery with automatic resume or restart if transfers fail because of network downtime issues.

Redwood’s managed file transfer solution allows teams to pass custom variables between workflows, segment large files or use compression for faster download. Teams can easily coordinate sensitive data exchange between internal and external partners while adhering to strict compliance regulations.

Managed file transfer with Redwood handles secure file transfer protocols including SFTP, FTPS, SCP, FTP over SSH, and more to ensure secure end-to-end connections. Create, import, and export SSL certificates and SSH keys, and assign SSH keys to users.

Frequently Asked Questions

Is there a difference between FTP and SFTP?

Yes, FTP, or file transfer protocol, is fundamentally different from SFTP, or secure file transfer protocol.

File Transfer Protocol is a standard protocol used to transfer files over the Internet between a client and FTP server. FTP is a basic protocol that was developed in the early days of the Internet, and it lacks default encryption or security measures. Data transmitted using FTP is vulnerable to interception, eavesdropping, and other security threats.

SFTP is a more secure version of FTP that does provide default encryption and other security measures to protect data in transit. SFTP uses Secure Shell (SSH) to encrypt all data transmitted between the client and SFTP server to protect it from unauthorized user access or interception.

When considering authentication differences, FTP uses a simple username and password authentication scheme, while SFTP uses more advanced authentication methods like public key authentication.

See how managed file transfer automation and security management improve business processes.

What are some variations to SFTP?

There are some variations to SFTP (secure file transfer protocol) that are worth noting:

  • FTPS: STP over SSL/TLS: This secure file transfer protocol uses SSL/TLS encryption to secure file transfers.
  • SCP or Secure Copy: This secure file transfer protocol uses SSH (Secure Shell) to encrypt file transfers.
  • WebDAV or Web Distributed Authoring and Versioning: This is a set of extensions to the HTTP/1.1 protocol that allows users to edit and manage files on remote servers.
  • AS2 or Applicability Statement 2: This protocol provides a secure way to exchange business documents over the Internet using digital certificates and encryption.

Discover the benefits of business process automation with Redwood.