Managed File Transfer (MFT): What It Is and Modern Alternatives

What Is Managed File Transfer?

Managed File Transfer (MFT) is enterprise software that handles secure file exchanges between systems, organizations, and users. Unlike basic file sharing or email attachments, MFT provides encryption, detailed audit logs, automated workflows, and centralized control over all transfers.

A typical MFT system handles three core functions:

• Secure transport: Files are encrypted during transfer using protocols like SFTP, FTPS, or AS2
• Audit and compliance: Every transfer is logged with timestamps, user IDs, and file details
• Automation: Scheduled transfers, triggered workflows, and integration with business systems

Most organizations adopt MFT because compliance requirements force their hand. When auditors ask how you transferred sensitive data, MFT gives you the receipts.

How MFT Differs from Regular File Sharing

Regular file sharing tools like Dropbox or Google Drive are built for individual users storing and syncing personal files. MFT is built for different problems entirely.

Regular file sharing:

• Focuses on syncing files to devices
• Per-user pricing model
• Basic link sharing with password protection
• Minimal audit capabilities

Managed File Transfer:

• Focuses on moving files between systems
• Enterprise licensing models
• Support for EDI, AS2, and legacy protocols
• Complete audit trails for compliance
• Automated workflows and scheduling

Large organizations often end up with a mix of FTP scripts, email attachments, and random file sharing tools. MFT platforms consolidate these into a single system with unified security controls.

Who Actually Needs MFT Software

MFT makes sense for organizations with specific requirements that simpler tools cannot meet:

Financial services: Banks and insurance companies exchange sensitive data with partners, regulators, and clearinghouses. Regulations like PCI DSS require documented audit trails.

Healthcare: HIPAA requires specific security controls for patient data transfers between providers, payers, and labs.

Manufacturing: Supply chain partners exchange EDI documents, quality certifications, and engineering files using legacy protocols like AS2.

Government contractors: Federal requirements often mandate specific encryption standards and audit capabilities.

If your organization exchanges files with external partners who require specific protocols, or if you face regulatory audits that demand complete transfer documentation, MFT fits those requirements.

That said, many organizations buy MFT software when they actually need secure file sharing with better controls. The distinction matters because MFT carries significant costs and complexity.

The Hidden Costs of Traditional MFT

Traditional MFT platforms from vendors like Axway, IBM, and TIBCO require substantial investment beyond the license fee:

Infrastructure costs: Most MFT solutions require on-premise servers or dedicated cloud instances. You need redundant systems for high availability.

Implementation: Initial deployment typically takes 3-6 months with professional services. Complex integrations with ERP, EDI, and legacy systems add time.

Ongoing maintenance: MFT servers need patching, monitoring, and capacity management. Most organizations dedicate at least one full-time administrator.

Training: The administrative interfaces are complex. Training technical staff costs time and money.

Licensing: Per-server, per-connection, and per-user fees add up. A mid-size deployment easily exceeds $100,000 annually.

For organizations that genuinely need MFT capabilities, these costs are justifiable. The problem is that many teams buy MFT when they actually need secure file sharing with better audit capabilities.

What is the Difference Between FTP and MFT?

FTP (File Transfer Protocol) is a basic protocol from 1971 that moves files between systems. It has no built-in encryption, authentication is minimal, and there is no logging or workflow capability.

MFT wraps secure protocols with management features:

What FTP lacks:

• No encryption (SFTP/FTPS add it separately)
• Username/password only authentication
• No audit logs
• Manual transfers or custom scripts
• No monitoring
• Single protocol support

What MFT adds:

• End-to-end encryption built in
• SSO, certificates, and MFA options
• Complete audit trails
• Built-in scheduling and workflows
• Real-time dashboards
• Support for SFTP, FTPS, AS2, HTTPS, and more

Organizations often start with FTP scripts, then graduate to SFTP, then eventually consider MFT when compliance requirements or volume make manual management impractical.

Cloud-Native Alternatives to Traditional MFT

Modern cloud platforms offer many MFT capabilities without the infrastructure overhead. For teams that need secure file sharing with audit trails rather than system-to-system automation, these alternatives make sense.

What cloud-native platforms provide:

• Encryption: Files encrypted at rest and in transit
• Audit logs: Complete activity history for every file
• Access controls: Permissions at organization, workspace, folder, and file levels
• SSO integration: Connect to Okta, Azure AD, Google, and other identity providers
• No infrastructure: Nothing to install, patch, or maintain

What they typically lack:

• AS2, EDI, and other legacy B2B protocols
• Automated scheduled transfers between systems
• On-premise deployment options

If your primary need is secure external sharing with clients and partners, not automated B2B data exchange, cloud platforms give you MFT-level security without the complexity.

Fast.io works this way. Files belong to the organization, not individual users. Every action is logged. Permissions go down to the folder and file level. External guests access files through branded portals without needing accounts. No server to manage.

Why Companies Use Managed File Transfer

Organizations adopt MFT for three primary reasons:

1. Compliance documentation

Auditors want proof that sensitive files were transferred securely. MFT gives them the receipts: sender, recipient, timestamp, and encryption status. For regulated industries, this documentation is mandatory.

2. Partner requirements

Trading partners, especially in retail and manufacturing, often require specific protocols like AS2 for EDI document exchange. MFT platforms support these legacy protocols alongside modern alternatives.

3. Volume and automation

When you transfer thousands of files daily, manual processes break down. MFT automates scheduled transfers, retries failed transactions, and alerts administrators to problems.

If these three drivers do not describe your situation, you may be overbuying. Many organizations purchase MFT for the security features when a modern cloud platform with proper controls would suffice at a fraction of the cost.

Evaluating MFT vs. Modern File Sharing

Before committing to a traditional MFT platform, assess what you actually need:

Choose traditional MFT if you:

• Exchange EDI documents with retail or manufacturing partners
• Need AS2 protocol support for trading partner compliance
• Transfer files automatically between internal systems on schedules
• Have dedicated IT staff to manage infrastructure
• Face regulatory requirements specifying MFT or equivalent controls

Choose modern cloud platforms if you:

• Share files with external clients and partners manually
• Need audit trails for compliance but not protocol-specific requirements
• Want security without infrastructure management
• Have teams that are not technical and need simple interfaces
• Prefer usage-based pricing over enterprise seat licenses

The worst outcome is paying for MFT complexity when you need secure sharing, or choosing a basic sharing tool when you actually need MFT automation. Match the solution to the actual problem.

Security Features That Matter

Whether you choose traditional MFT or a modern alternative, some security capabilities are required for enterprise file transfer:

Encryption: Files must be encrypted both during transfer and when stored. Look for AES-256 encryption and TLS 1.2+ for transport.

Authentication: Single sign-on (SSO) integration with your identity provider keeps access control in one place. Multi-factor authentication adds another layer.

Audit logs: Every file action should be logged. Who viewed it, who downloaded it, when access was revoked. These logs must be immutable and exportable for compliance reviews.

Fine-grained permissions: Organization-wide policies, workspace-level defaults, folder-specific rules, and individual file controls. Different content needs different access levels.

Link controls: Password protection, expiration dates, view-only restrictions. You can also revoke access instantly when a deal falls through or a relationship ends.

Fast.io includes all of these features in a cloud-native platform. Files stay encrypted, access is controlled, and every action is logged. No MFT servers to manage.