Every day, businesses move massive volumes of data — customer records, financial transactions, employee files, and more. Those files need to travel safely and reach the right systems intact and on time. But older file transfer methods like FTP or email can be slow, insecure, or hard to scale and don’t always get the job done.
Fortunately, managed file transfer (MFT) software offers a more secure and reliable way to send and receive files. It automates routine transfers, secures your data end to end, and gives teams full control over how files move between systems and partners.
In this guide, we’ll explain what MFT is, how it works, and why more businesses are using it to modernize and simplify their file transfer processes.
What’s Managed File Transfer
Managed file transfer, or MFT, gives businesses a safer, more reliable way to move files between systems, teams, and partners. Unlike traditional methods like FTP or email, MFT adds layers of protection — such as end-to-end encryption, access controls, and detailed activity logs. MFT also automates routine tasks like scheduling, file routing, and delivery confirmations, which reduces delays and human error. Because of this, industries like healthcare, finance, and retail rely on it to safeguard sensitive data, maintain audit trails, and meet strict compliance requirements.
How Does MFT Work?
MFT file transfer works by using specialized software to manage and automate file exchanges. Here’s a breakdown of the process:
Deployment: IT teams either install the MFT software on an MFT server or configure access through a cloud-based service.
Configuration: Administrators define who can send or receive files, what protocols to use, and when transfers should occur.
Automation: The MFT system moves files between endpoints based on predefined triggers, schedules, or events, eliminating the need for manual intervention.
Security and encryption: MFT uses encryption protocols like SFTP, FTPS, or AS2 to protect files during transmission and storage.
Monitoring and reporting: Teams can track file transfers in real time, review logs, and generate compliance reports as needed.
Key Benefits of MFT Software
Enhanced Security
Data breaches can be costly and damaging to a company’s reputation. MFT software uses advanced encryption and secure protocols to protect sensitive files, reducing the risk of cyberattacks and unauthorized access.
Added Scalability
As businesses grow, their file transfer needs often do, too. MFT solutions scale to handle more data and adapt to changing needs without sacrificing speed or reliability.
Improved Visibility
MFT solutions offer real-time tracking, alerts, and reporting. With full visibility into file transfers, teams can monitor activity and catch issues before they become full-blown problems.
Increased Efficiency
By automating routine file transfers, MFT reduces manual work and helps prevent errors. This frees up teams to focus on higher-value tasks.
Simplified Compliance
Industries like healthcare, finance, and retail follow strict data protection regulations (HIPAA, PCI-DSS, and GDPR, respectively). MFT software supports compliance with features like encrypted file transfers, built-in access controls and other security features, and detailed audit logs.
MFT vs. FTP/SFTP
Many businesses still rely on File Transfer Protocol (FTP) and Secure File Transfer Protocol (SFTP) for moving files. However, these traditional methods come with limitations. Here’s how MFT compares:
Security
FTP/SFTP: Basic encryption
MFT: End-to-end encryption and access controls
Automation
FTP/SFTP: Manual transfers
MFT: Automated scheduling and workflows
Compliance
FTP/SFTP: No built-in compliance tools
MFT: Preconfigured compliance support
Monitoring
FTP/SFTP: Limited visibility
MFT: Real-time tracking and reporting
Scalability
FTP/SFTP: Doesn’t support large-scale file transfers
MFT: Handles high-volume, complex file transfers
How to Choose the Right MFT Solution
Not all managed file transfer platforms offer the same capabilities, so it’s important to know what to look for before you commit. When comparing MFT options, focus on features that support your operations today and can scale with your business as it grows.
Security Protocols
Look for MFT software that protects your data with end-to-end encryption, multi-factor authentication, and role-based access controls. Features like these help you keep sensitive files secure.
Automation Capabilities
Look for software that lets you automate file transfers with scheduled jobs, event-based triggers, and custom workflows. By automating repetitive tasks you'll reduce errors and save time.
Scalability
Make sure the solution can handle larger file volumes and work with multiple protocols like SFTP, FTPS, HTTPS, or AS2. If you're growing quickly or moving to the cloud, pick a platform that scales easily with your needs.
Integration with Existing Systems
Select a system that connects smoothly with your existing internal tools — like enterprise resource planning (ERP), customer relationship management (CRM), or HR software — so you don’t have to disrupt your workflows just to move files.
Reliability and Uptime
Don’t overlook dependability. Choose an MFT solution that delivers high uptime, includes failover protection, and offers disaster recovery — so your file transfers keep running smoothly, even if something goes wrong.
Ease of Use
Pick a platform that’s easy to navigate. A user-friendly interface helps you and your team set up transfers, onboard users, and troubleshoot issues without needing constant IT support.
Talk to an EDI Expert
Adopting MFT software is more than a technical upgrade — it’s a smart move toward stronger security, smoother workflows, and easier compliance. When it comes to protecting sensitive data, cutting down on manual work, and keeping up with changing regulations, the right MFT solution can make a real difference.
Need guidance on finding the MFT solution that’s best for your business? Connect with an EDI expert to get started.
MFT FAQs
How Does EDI Compare to APIs? Should Businesses Use Both?
Electronic Data Interchange (EDI) has been the backbone of B2B transactions for decades. It enables companies to exchange invoices, purchase orders, and shipping notices in standardized formats. However, application programming interfaces (APIs) offer real-time data exchange, making them ideal for businesses that require instant updates and greater system flexibility.
Rather than replacing EDI, APIs complement it by handling dynamic transactions, such as real-time inventory updates or customer interactions, while EDI manages structured, high-volume exchanges like bulk orders. Many modern businesses now use a hybrid approach, integrating EDI and APIs to improve supply chain efficiency.
What Role Does EDI Play in Data Governance?
Data governance ensures that business data remains accurate, consistent, and compliant with regulatory standards. EDI plays a key role in this process by standardizing how organizations exchange information with trading partners. Because EDI follows strict formatting rules, it reduces errors from manual entry and ensures that information is properly structured before entering internal systems.
EDI also supports compliance efforts by creating clear audit trails for business transactions. This is especially important in industries with strict regulatory requirements, such as healthcare, finance, and retail. As businesses focus more on data security and integrity, EDI’s structured approach makes it a valuable tool in data governance strategies.
Do Companies Still Need EDI Mapping in Modern Integrations?
EDI mapping is the process of translating data between different formats so different business systems can process it correctly. With the rise of cloud-based integrations and APIs, some businesses may question whether traditional EDI mapping is still necessary. While modern platforms have streamlined the process, mapping still matters.
Even with advanced integration tools, businesses still need to transform data between different trading partners, internal systems, and regulatory formats. Because of this, mapping is far from obsolete. In fact, newer solutions, such as AI-driven data mapping and cloud-based translation services, have made the process more efficient.
What Are the Key Differences Between On-Premises and Cloud-Based EDI Solutions?
When implementing an EDI solution, businesses have two options: to host it on-premise or use a cloud-based platform. On-premise EDI systems require significant IT infrastructure and ongoing maintenance, but they offer complete control over data security and customization. As such, organizations with strict regulatory requirements — like healthcare providers and financial institutions — often prefer this setup. Cloud-based EDI, on the other hand, offers scalability, automatic updates, and easier integration with modern business applications. It reduces the burden on IT teams and allows businesses to expand their trading partner network more easily. However, when choosing, companies should consider factors like vendor reliability, data security, and long-term costs.