MFT Encryption: How to Best Protect Your File Transfers

If your organization processes sensitive content and exchanges it with trusted third parties, you’re more than likely already aware of the critical importance of encryption in safeguarding data during transit. In a current business landscape marked by sophisticated cyber threats like malware attacks, security misconfigurations, and other forms of unauthorized access, the security of file transfers cannot be underestimated. Encryption provides a protective barrier, ensuring that sensitive information remains confidential and secure wherever it’s stored but also whenever it leaves your network.

Secure managed file transfer encryption integrates advanced security protocols into the transfer process to safeguarding data integrity and privacy, especially as files move from one user, system, organization to another. As organizations increasingly rely on managed file transfer (MFT) solutions for the digital exchange of information, understanding MFT encryption becomes critical. In this "how–to" guide, we’ll explore the fundamentals of MFT encryption, dive into the various encryption methods available, and provide actionable insights for businesses looking to enhance their managed transfer security.

MFT Encryption Basics

At the heart of MFT encryption (or any communication channel encryption, e.g., email, SFTP, file sharing, etc.) lies the principle of transforming readable data into an encoded format that can only be decoded or accessed by authorized parties. This process not only protects data from cyber threats but also ensures regulatory compliance with global data protection laws and standards, like GDPR, DORA, CMMC, DPA 2018, PCI DSS, BDSG, and many more. MFT encryption incorporates several layers of security, including the use of encryption algorithms and secure protocols, to provide end–to–end protection for file transfers.

Implementing MFT encryption in your business is not just about selecting any encryption standard but choosing the right encryption methods that align with your specific security requirements. Businesses must be equipped with the proper knowledge to make informed decisions about their encryption strategies. Understanding the basics, like Advanced Encryption Standard (AES) for MFT to MFT with end-to-end encryption, is a good place to start.

Why Encryption Matters for Your Business

Encryption and its significance extends will beyond merely securing data; it is a critical component of trust in business operations. Businesses look to MFT encryption to protect against data breaches and cyberattacks, thus ensuring that sensitive content like financial records, personally identifiable and protected health information (PII/PHI), and intellectual property remains confidential. MFT encryption not only protects an organization’s competitive edge but it also allows them to maintain regulatory compliance and customer trust as well as avoid costly fines, penalties, and litigation costs.

MFT encryption also signals your organization’s commitment to data security, enhancing your reputation among clients and partners. The introduction to managed file transfer encryption therefore is not just a technical necessity but a strategic business move to foster a secure and reliable digital environment.

Different Kinds of Encryption Explained

Understanding the various types of encryption technology is essential for businesses looking to secure their file transfers. The two primary types of encryption used in MFT are symmetric and asymmetric encryption. Let’s take a closer look at each:

Symmetric Encryption: One Key Does it ALL

Symmetric encryption relies on a solitary key for the dual processes of encryption and decryption. This singular key approach simplifies the overall encryption process, allowing the same key to first transform readable data into an unintelligible format and then revert it back to its original form. This streamlined process not only enhances the simplicity of the encryption and decryption tasks but also significantly boosts the speed at which they can be executed.

This efficiency is particularly well–suited for businesses that transfer large volumes of files that to be securely transferred or stored. Symmetric encryption is looked favorably upon for its relative simplicity and lower computational requirements compared to its counterpart, asymmetric encryption.

The use of a single key for both encryption and decryption, however, also introduces a potential vulnerability—the necessity of key exchange. Symmetric encryption security hinges on the secure exchange and management of this key. If a malicious entity were to gain access to the key, the content being transferred, as well as the entirety of the encrypted communication, could be compromised. So, while symmetric encryption offers a streamlined and efficient method for handling large data sets, it also necessitates rigorous key management protocols to safeguard the confidentiality of the data it protects.

Asymmetric Encryption: Advanced Encryption for Extra Security

Asymmetric encryption is an advanced encryption technique that employs two distinct keys in its operation. This two key format is a fundamental shift from the traditional symmetric encryption that relies on a single key for both encryption and decryption processes. The first key, known as the public key, is openly shared and accessible to anyone wishing to send a secure message. The first key encrypts the data, effectively scrambling the information into an unreadable format to anyone except the intended recipient.

The second key, referred to as the private key, remains strictly confidential. This private key decrypts the encrypted data (encrypted by the first, or corresponding, public key) and converts the jumbled information back into its original, readable form. The necessity for each key to perform its designated role – one for encryption and the other for decryption – establishes a stronger, more fortified barrier against unauthorized access, significantly elevating the security level of the sensitive files to be transferred.

This enhanced security provided by asymmetric encryption, however, comes with a notable trade–off in terms of computational speed. The mathematical algorithms that drive the generation and application of these key pairs are inherently more complex and resource–intensive than those used in symmetric encryption methods. This complexity results in slower processing times when encrypting and decrypting data, especially when handling large volumes of information or when deployed in environments with limited computational resources.

Drawbacks aside, asymmetric encryption is widely regarded as a critical component in safeguarding digital communications, particularly in scenarios where the risk of interception by unauthorized entities is high. It can, in fact, be considered a cornerstone of modern secure communication protocols, including those used for secure email transmissions, online transactions, and the establishment of secure connections over the internet, such as in HTTPS.

Comparing Symmetric vs. Asymmetric Encryption: Which MFT Encryption is Right for You?

Each encryption method comes with its own set of strengths, tailored to serve different use cases effectively. Symmetric encryption, while fast and efficient, is best suited for less sensitive information or internal transfers where speed is of the essence. Asymmetric encryption, despite its complexity and slightly slower performance, is unmatched in terms of security, making it indispensable for protecting highly sensitive or regulated data during transmission.

The choice between these encryption methods should be based upon your organization’s specific security requirements, compliance obligations, and the sensitivity level of the data that needs to be transferred.

Don’t Forget Digital Signatures and Hashing

Beyond these foundational encryption methods, encryption features like digital signatures and hashing can further enhance the security of MFT file transfers.

Digital signatures detect any unauthorized alterations made to a file’s content during its journey from sender to recipient. Securing a file with a digital signature begins when the file sender uses a digital signature algorithm to generate the signature. This involves the creation of a unique hash (a fixed–size string of bytes derived from the file’s content) and the encryption of this hash with the sender’s private key, which is part of a cryptographic pair of keys (the other being a public key) unique to the sender. The encrypted hash, along with the sender’s digital certification (which includes the public key and helps verify the sender’s identity), constitutes the digital signature of the file.

When the recipient receives the file, they can use the sender’s public key to decrypt the hash. Then, the recipient generates a new hash from the received file and compares it to the decrypted hash. If the two hashes match, it confirms that the file has not been altered in transit, thus verifying its integrity and authenticity. Digital signatures not only help in detecting any tampering with the file’s content during its transit but also play a significant role in verifying the sender’s identity and ensuring that the file’s origin is genuine and trustworthy.

Hashing involves the generation of a unique hash value, a string of characters, derived from the contents of the file itself. When a file is sent, its hash value is calculated and transferred along with it. Upon receipt, the file’s hash value is recalculated; if the two hash values match, it confirms that the file has not been tampered with during transmission, thereby verifying its integrity.

The combination of hashing and encryption within MFT systems not only ensures that files remain unchanged and confidential during transit but also establishes a foundation of trust and reliability for both senders and recipients. This dual–layer approach to security underscores the commitment of MFT solutions to uphold the highest standards of data protection at a time when cyber threats are increasingly sophisticated and pervasive.

Encryption Protocols for Managed File Transfer Solutions

When selecting an encryption method for MFT, businesses have a variety of options to consider. The choice often depends on the specific needs of the organization, including the level of security required, the volume of data to be transferred, and regulatory compliance considerations. Some of the most common encryption protocols used in MFT include Secure Sockets Layer (SSL), Transport Layer Security (TLS), Advanced Encryption Standard (AES). We’ll take a look at these protocols and some others below.

• Advanced Encryption Standard (AES): AES encryption is widely regarded as one of the most secure encryption standards available, approved by the National Institute of Standards and Technology (NIST) for encrypting sensitive data. It provides strong encryption capabilities and is versatile enough to be implemented in various MFT scenarios, making it a preferred choice for many organizations.
• Secure Socket Layer (SSL): This protocol is essential for establishing an encrypted link between a server and a client, ensuring data sent between a user’s browser and a server is securely transmitted. SSL’s end–to–end encryption is crucial for protecting data against breaches and cyber threats, as well as for demonstrating regulatory compliance with data privacy laws and standards.
• Transport Layer Security (TLS): TLS is a fundamental protocol providing secure data exchange between two systems. TLS works by using a combination of symmetric and asymmetric encryption methods, facilitating a secure handshake between communicating devices and therefore a secure channel for data exchange. For MFT, this means that files are encrypted from the point they leave the sender until they are decrypted by the recipient, offering end–to–end encryption.
• FTP Secure or FTP–SSL (FTPS): FTPS is an extension of the File Transfer Protocol (FTP) that adds support for the Transport Layer Security (TLS) and, previously, the Secure Sockets Layer (SSL) cryptographic protocols. It encrypts the data channel and the control channel, providing secure file transfer capabilities.
• SSH File Transfer Protocol (SFTP): Also known as Secure File Transfer Protocol, SFTP provides file access, file transfer, and file management functionalities over any reliable data stream. It is part of the SSH Protocol (Secure Shell) suite, which provides encryption and secure network operations over an insecure network.
• Hypertext Transfer Protocol Secure (HTTPS): While typically associated with secure web browsing, HTTPS is also used in the context of MFT for secure file transfers over the web. It uses TLS (or SSL) to encrypt the HTTP requests and responses, thereby securing the data during transfer.
• Secure Copy Protocol (SCP): This protocol is based on the Secure Shell (SSH) protocol and provides a secure and authenticated method for transferring files between hosts. It uses SSH to keep the transfer encrypted and secure and is often used in automated processes that require file transfers between systems in secure environments.

End–to–End Encryption for Managed File Transfer

Implementing MFT with end–to–end encryption ensures that data is encrypted at its original point and remains encrypted until it reaches its final destination. This means that the data is inaccessible to unauthorized parties at any point during the transfer, providing the highest level of security for sensitive information. End–to–end encryption is especially critical in scenarios where data passes through multiple networks or resides in cloud storage, as it mitigates the risk of interception or unauthorized access.

End–to–end encryption in MFT not only secures data during transit but also plays a vital role in achieving compliance with data protection regulations such as the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA). By implementing MFT solutions that offer end–to–end encryption, businesses can significantly enhance their data security posture and ensure compliance with global data protection standards.

MFT Encryption for Regulatory Compliance

Data breaches have created devastating consequences for businesses. These incidents not only lead to substantial financial losses but also damage the trust and credibility of the affected organizations. Adhering to compliance standards established by regional, industry–specific, and local data protection laws therefore has emerged as a critical business imperative.

MFT encryption, by leveraging robust encryption protocols, ensures that data in transit and at rest remains secure and inaccessible to unauthorized entities. This is particularly relevant in light of comprehensive regulations such as the GDPR in the European Union, which mandates strict guidelines on personal data handling, and the Health Insurance Portability and Accountability Act (HIPAA) in the United States, which sets the standard for protecting sensitive patient data. Both of these regulations emphasize the importance of implementing strong data security measures, including encryption, to prevent data breaches and unauthorized disclosures.

Under GDPR, for instance, businesses are required to implement technical and organizational measures to ensure a level of security appropriate to the risk, including the encryption of personal data. This means that any organization handling EU citizens’ data, regardless of its geographical location, must employ encryption technologies to comply with GDPR’s stringent requirements.

Similarly, HIPAA’s Security Rule explicitly requires covered entities to consider the encryption of personally identifiable and protected health information (PII/PHI) as a means to securing patient data, both in transit over networks and at rest in storage systems.

Still debating between FTP and managed file transfer? Here are six reasons why managed file transfer is better than FTP.

By adopting MFT encryption solutions that align with these standards, businesses not only enhance their data security posture but also strategically position themselves to pass rigorous compliance audits and demonstrate compliance with strict data privacy and data protection regulations. By ensuring the confidentiality, integrity, and availability of sensitive information, businesses can maintain compliance, avoid potential financial penalties, and protect their reputation in an increasingly data–driven economy.

Latest Developments in MFT Encryption Technology

MFT encryption has seen significant advancements, with new encryption protocols being developed to further enhance security. These protocols are designed to tackle the challenges posed by emerging threats and the increasing complexity of cyberattacks. The evolution of encryption protocols, such as the transition from Secure Sockets Layer (SSL) to Transport Layer Security (TLS), demonstrates the continuous efforts to improve security and efficiency in data transfers.

These advancements will continue to ensure that MFT solutions offer the most up–to–date protection for data in transit. As these protocols evolve, they bring improvements in not just security and compliance but also speed, reliability, and compatibility. Businesses are therefore encouraged to stay informed about the latest advancements in encryption technology and standards to ensure they maintain a strong security posture.

Integrating Blockchain for Enhanced MFT Security

The integration of blockchain into MFT solutions introduces a new paradigm in secure file transfer. It offers a way to securely manage encryption keys, authenticate user identities, and verify the integrity of transferred files.

Blockchain technology, best known for its role in cryptocurrencies, is finding new applications in enhancing security for MFT solutions. By leveraging blockchain, MFT systems can achieve unparalleled security, transparency, and integrity in the transfer process. Blockchain’s decentralized nature makes it nearly impossible to tamper with data, as each transaction is recorded across multiple nodes. This level of security is particularly beneficial for MFT, ensuring that file transfers are not only secure but also verifiable and transparent.

For businesses requiring the highest security level for their file transfers, blockchain–enhanced MFT solutions represent the cutting edge of encryption technology.

MFT Encryption and Artificial Intelligence

The emergence of artificial intelligence (AI) is poised to redefine managed file transfer and data security strategies. AI algorithms have the potential to enhance encryption methods, making them more dynamic and difficult for cybercriminals to breach. For instance, AI can be used to analyze patterns in data access and transfer processes, identifying potential threats in real–time and automatically adjusting encryption measures to mitigate these risks.

AI–driven encryption can also optimize MFT system efficiency by determining the most appropriate encryption methods and protocols based on the type and sensitivity of the data being transferred. This adaptive approach to encryption not only improves security but also streamlines the transfer process, ensuring that data is protected without compromising on speed or user experience. As AI technologies continue to evolve, their integration into MFT encryption strategies represents a promising frontier for enhancing data security.

Despite all the advancements AI has to offer for MFT and other file transfer technologies, there are significant AI risk that jeopardize content confidentiality.

Choosing the Right MFT Encryption Solution for Your Business

When selecting a managed file transfer solution, businesses must consider several key criteria to ensure the solution meets their specific needs. If security and compliance are requirements, then businesses must consider the type of encryption used in a prospective MFT solution. Criteria should include the strength of the encryption protocol, whether it uses symmetric or asymmetric encryption, which encryption protocol best supports specific compliance regulations, and more.

Other criteria, including the scalability of the solution, performance and reliability, ease of use, and the ease of integration into existing systems should also be considered. Evaluating MFT solutions against these criteria allows businesses to choose a solution that not only provides robust security but also aligns with their operational requirements.

Implementation Best Practices for MFT Encryption

MFT encryption is only as good as the tools, systems, and processes used to implement it. These implementation best practices will help ensure a robust and secure encryption system for your managed file transfer solution and workflows.

1. Use strong encryption algorithms: Implement industry-standard encryption protocols like AES 256 encryption for data at rest and TLS 1.2 or higher for data in transit. AES-256 is considered highly secure and is widely used for protecting sensitive data. For data in transit, TLS 1.2 or 1.3 provides strong protection against eavesdropping and man-in-the-middle attacks.
2. Manage encryption keys: Establish a robust key management system to generate, distribute, store, and rotate encryption keys securely. This includes using a hardware security module (HSM) for key generation and storage, implementing a secure process for key distribution, regularly rotating keys, securely backing up keys and implementing a recovery process, and ensuring proper access controls for key management systems.
3. Employ end-to-end encryption: Ensure data is encrypted throughout its entire journey. End-to-end encryption means encrypting data before it leaves the sender’s system, maintaining encryption during transit through any networks or cloud services, keeping data encrypted while at rest in any storage systems, and only decrypting data once it reaches the intended recipient.
4. Implement access controls: Use multi-factor authentication (MFA) and role-based access control (RBAC) to restrict access to encrypted data and keys. Effective access controls includes requiring MFA for all users accessing sensitive data or systems, implementing least privilege principles, giving users only the access they need, regularly reviewing and updating access permissions, and logging and monitoring all access attempts to encrypted data and key management systems.
5. Perform regular security audits: Conduct periodic assessments of your encryption implementation to identify and address vulnerabilities. This should include penetration testing to identify potential weaknesses, code reviews of encryption implementations, checking for proper configuration of encryption systems, verifying that all sensitive data is actually being encrypted as intended, and assessing the strength of current encryption methods against emerging threats.
6. Adhere to compliance regulations: Ensure your encryption practices meet regulatory compliance laws and standards. This may include GDPR requirements for protecting personal data of EU citizens, HIPAA rules for safeguarding protected health information, PCI DSS standards for securing payment card data, and any industry-specific or regional regulations that apply to your organization. Finally, regularly review and update your practices to maintain compliance as regulations evolve.
7. Encrypt metadata: Don’t forget to encrypt file metadata, not just the file contents. This includes file names and extensions, creation and modification dates, author or owner information, file size, and other attributes. Encrypting metadata prevents information leakage that could be exploited by attackers.
8. Balance security with performance: Use hardware acceleration for encryption when available, implementing efficient software encryption libraries, optimizing network protocols for encrypted transfers, considering selective encryption for less sensitive data to reduce overhead, and using compression before encryption to improve overall performance.
9. Invest in backup and recovery: Implement secure backup and recovery processes for encrypted data and encryption keys. This includes regularly backing up encrypted data and storing backups securely, implementing a secure key backup and recovery system, testing recovery procedures regularly to ensure they work as expected, using key escrow or split-key systems for critical data, and ensuring that backup and recovery processes themselves are encrypted and secure.
10. Train employees and users: Educate employees on the importance of encryption and proper handling of encrypted data and keys. Provide security awareness training on how to use encryption tools correctly, educate users about the risks of unencrypted data transfer, teach best practices for password and key management, regularly update training to cover new threats and technologies, and conduct simulations or exercises to test user understanding and compliance.

By implementing these MFT encryption best practices, organizations can significantly enhance the security of their MFT solutions, protecting their data and maintaining the trust of their customers and partners.

Kiteworks Helps Organizations Protect Their File Transfers with Secure Managed File Transfer

Encryption is not just a technical necessity but a strategic imperative in a business climate challenged by cyber threats. MFT encryption therefore plays a crucial role in safeguarding sensitive data during transit. Understanding the basics of MFT encryption, exploring the various encryption methods available, and implementing advanced encryption features are essential steps for businesses looking to enhance their data transfer security. The latest developments in encryption technology, including the integration of blockchain and AI, offer promising avenues for further strengthening MFT solutions.

Choosing the right MFT encryption requires careful evaluation of encryption criteria, assessing vendor capabilities, and implementing best practices for encryption. By adhering to these guidelines, businesses can ensure that their file transfers are secure, compliant with regulatory standards, and optimized for efficiency.

The Kiteworks Private Content Network, a FIPS 140-2 Level validated secure file sharing and file transfer platform, consolidates email, file sharing, web forms, SFTP and managed file transfer, so organizations control, protect, and track every file as it enters and exits the organization.

Kiteworks secure managed file transfer provides robust automation, reliable, scalable operations management, and simple, code–free forms and visual editing. It is designed with a focus on security, visibility, and compliance. In fact, Kiteworks handles all the logging, governance, and security requirements with centralized policy administration while a hardened virtual appliance protects data and metadata from malicious insiders and advanced persistent threats. As a result, businesses can transfer files securely while maintaining compliance with relevant regulations

Kiteworks secure managed file transfer supports flexible flows to transfer files between various types of data sources and destinations over a variety of protocols. In addition, the solution provides an array of authoring and management functions, including an Operations Web Console, drag–and–drop flow authoring, declarative custom operators, and the ability to run on schedule, event, file detection, or manually.

Finally, the Kiteworks Secure Managed File Transfer Client provides access to commonly–used repositories such as Kiteworks folders, SFTP Servers, FTPS, CIFS File Shares, OneDrive for Business, SharePoint Online, Box, Dropbox, and others.

In total, Kiteworks secure managed file transfer provides complete visibility, compliance, and control over IP, PII, PHI, and other sensitive content, utilizing state–of–the–art encryption, built–in audit trails, compliance reporting, and role–based policies.

To learn more about Kiteworks Secure Managed File Transfer and its security, compliance, and automation capabilities, schedule a custom demo today.

Additional Resources

• Blog Post Managed File Transfer Software Buyer’s Guide
• Blog Post Secure Managed File Transfer: Which Solution is Best for Your Business?
• Video Kiteworks Secure Managed File Transfer: The Most Secure and Advanced Managed File Transfer Solution
• Blog Post  Essential Data Encryption Best Practices
• Blog Post Eleven Requirements for Secure Managed File Transfer