FTP alternative: Why FTP is insecure – and what actually protects your data

The File Transfer Protocol (FTP) was developed in 1971. At the time, data security was not a serious consideration. Today, FTP transmits login credentials and file contents unencrypted by default. Anyone intercepting traffic along the way can read everything in plain text.

Despite this, FTP remains deeply embedded in many organisations' infrastructure: as an interface to partners, as a transfer route for large files, or as a legacy process that someone set up at some point and has been running untouched ever since. The longer this continues, the more workarounds accumulate around a system that should have been replaced long ago.

This article explains why FTP is no longer a viable foundation for file transfers, what FTP alternatives are available, and why replacing a protocol alone is not enough to properly retire FTP.

TL;DR – the key points

• FTP is structurally insecure: login credentials and file contents are transmitted without encryption.

• Extended protocols such as SFTP and FTPS close the most significant gaps, but bring their own complexity and limitations.

• GDPR-compliant working is not possible with standard FTP – fines and reputational damage are real risks.

• Modern platforms replace the entire process: secure transmission, access management, traceability and automation in one solution.

Why is FTP insecure?

Access to the FTP server does require authentication – a username and password. However, both uploads to and downloads from the server are transmitted without encryption. Extended variants such as SFTP and FTPS offer greater security during transmission, but data is still stored in plain text.

In both cases, attackers have an easy route to sensitive data: through a man-in-the-middle attack, compromised network segments, or simply a public Wi-Fi connection. The consequences for affected organisations can be severe.

There are also structural weaknesses that cannot be resolved through configuration:

• No transport encryption in standard FTP: usernames, passwords and file contents travel across the network as plain text.

• No encryption of stored data: access to the FTP server means direct access to all files stored there.

• No granular access management: anyone with access to the server sees more than they should.

• No audit-proof traceability: who downloaded or modified a file, and when, is almost impossible to reliably reconstruct.

• Firewall complexity: FTP uses two ports for the control and data channels, making firewall configurations error-prone and maintenance-intensive.

For GDPR, this is a direct problem. Article 32 requires technical and organisational measures that reflect the current state of the art. Organisations transmitting personal data via FTP fail to meet this standard, accept security vulnerabilities, and risk not only data loss but also significant fines.

Why FTP persists despite the risks

Anyone aware of these risks will inevitably ask: why is FTP still running in so many organisations? The answer rarely lies in technical conviction – it lies in accumulated complexity.

FTP has been embedded in existing infrastructure for years: as an interface to an accountant, as an automated batch transfer between systems, as a connection to a supplier that someone configured ten years ago and that has been running ever since. Over time, workarounds breed further workarounds, until the original system is so deeply embedded in day-to-day operations that replacing it feels like a major project.

There is also a widespread misconception about costs. Many IT decision-makers assume that FTP, as existing infrastructure, is "free", while a modern solution would require additional budget. The FTAPI Secure Data Report 2025 shows that 56 per cent of organisations cite technical implementation barriers as a central challenge when introducing secure data exchange solutions – and the same proportion cite associated costs.

What often gets overlooked: neglected FTP servers, absent key management, manually maintained access rights, and the latent risk of a security incident all generate ongoing costs that are harder to quantify than a licence fee – but no less real.

The most common FTP alternatives

Anyone looking to replace FTP has several options – each with its own merits and its own limitations. The right choice depends on the specific requirements of your organisation: who is transferring data to whom? How often and in what volume? Do external partners need to be involved? And what compliance requirements apply?

SFTP – SSH File Transfer Protocol

SFTP is the most commonly recommended FTP alternative. Despite the name, SFTP has no technical connection to FTP. It is built on the SSH protocol and is an independent protocol designed from the ground up for secure data transfer.

Transfers are fully encrypted, and authentication is handled via password or SSH key pair. As only a single port is required (typically port 22), SFTP is also more firewall-friendly than standard FTP.

Typical use case: automated, recurring transfers between two IT systems – for example, a nightly batch transfer between an ERP system and an accountant's system, or regular data exchange with a fixed technology partner. Both sides have IT expertise, the connection is configured once, and then runs reliably.

Limitations to be aware of:

• Files remain unencrypted on the server unless additional protection is configured.

• External recipients need an SSH client – which creates friction in practice, particularly for non-technical partners.

• Key management and administration require IT resources.

• The protocol itself provides no native support for compliance workflows, access histories, or permission concepts.

In short: SFTP is technically sound for internal or closely coordinated transfers between IT-literate systems, but is not a complete solution for GDPR-compliant data exchange with varying external recipients.

FTPS – FTP over SSL/TLS

FTPS extends standard FTP with an SSL/TLS layer, encrypting the transmission channel. There are two modes: explicit FTPS, where the client actively requests an encrypted connection, and implicit FTPS, where encryption is assumed from the outset.

Typical use case: FTPS is particularly relevant for organisations that already operate FTP-based processes and TLS infrastructure and are looking for a gradual migration path. Organisations that want to continue using existing FTP clients while improving transmission security can use FTPS as an interim solution – for example, when exchanging accounting data with a software provider that already supports FTPS.

Limitations to be aware of:

• Two ports for the control and data channels – firewall configuration remains complex.

• Data storage on the server remains unencrypted.

• No integrated user management or access history.

• Certificate management creates ongoing administrative overhead.

In short: FTPS addresses the transmission problem, not the storage and compliance problem. For organisations with existing TLS infrastructure seeking a phased migration, it can serve as an interim step – but not a final destination.

AS2 – Applicability Statement 2

AS2 is a transmission standard used primarily in EDI (Electronic Data Interchange) environments between trading partners. Data is encrypted and digitally signed before being transmitted via HTTPS, and receipt is confirmed through Message Disposition Notifications (MDNs).

Typical use case: AS2 is the standard for structured, recurring B2B data flows in retail, logistics and manufacturing – for example, the automated exchange of purchase orders, delivery notes or invoices between a wholesaler and their suppliers.

Limitations to be aware of:

• High barrier to entry: AS2 connections require configuration and certificate exchange on both sides.

• Poorly suited to exchanges with varying or non-technical recipients.

• Outside the EDI context, it is not a general-purpose standard.

In short: AS2 is the right choice for structured, recurring B2B data flows – not for day-to-day exchanges with internal teams or changing external contacts.

HTTPS – file transfer over the web

Many modern file transfer services use HTTPS as their transmission protocol. Files are uploaded or downloaded via a TLS-secured connection in the browser, with no client installation required on the recipient's side.

Typical use case: HTTPS-based file transfer works well for ad-hoc collaboration with external partners who have no IT infrastructure of their own – for example, when a solicitor submits documents, a client uploads files, or a freelancer delivers work. The recipient needs nothing more than a browser.

Limitations to be aware of:

• TLS encrypts only the transmission, not the stored file.

• Without an overarching solution, there is no access control, no audit trail, no permission management.

• As a protocol alone, it is not a substitute for a structured file transfer system.

In short: HTTPS is the foundation of many good solutions – but it is only a foundation. What is built on top of it determines the actual security and compliance value.

MFT – managed file transfer

Managed file transfer is not a single protocol but a solution category that combines secure file transfers with automation, monitoring, access management and compliance reporting. MFT systems typically support multiple protocols (SFTP, FTPS, AS2, HTTPS) and add a centralised management layer on top.

Typical use case: MFT is the right approach when an organisation needs to centrally manage and audit-compliantly document many different file transfer processes – for example, in regulated industries such as financial services or healthcare. Rather than configuring a separate protocol for each use case, all transfers run through a single interface.

Limitations to be aware of:

• Traditional solutions are often server-centric and require IT administration.

• External recipients frequently need their own account or client.

• Licence and operating costs vary significantly between providers.

In short: MFT is the right approach for organisations looking to scale, automate and compliantly document file transfers – provided the chosen solution allows external recipients to be onboarded easily, without creating IT overhead on either side.

What a genuine FTP alternative needs to deliver

Many organisations replace FTP with SFTP – and end up with a more secure protocol but the same underlying process. Access history, external onboarding, and GDPR-compliant storage are not protocol questions.

A complete FTP replacement requires a platform that structurally combines security, usability and compliance requirements:

• End-to-end encryption during transmission and storage

• GDPR-compliant data processing with defined storage locations, retention periods and processing records

• Granular permission management, configurable by person, data room and action

• Audit-proof activity history with complete documentation of who accessed which file and when

• Easy access for external recipients without client installation on their side

• Integration with existing systems via API, Outlook, ERP or HRMS

FTAPI as a secure FTP alternative

The criteria above describe what an FTP replacement must structurally deliver – so that security does not have to be bought back through workarounds. FTAPI brings all of these requirements together on a single platform.

Data is encrypted with AES-256, both during transmission and in storage. Access rights can be managed in granular detail, and every activity is logged in an audit-proof manner. The platform is BSI C5 Type 2 certified, GDPR-compliant, and operated exclusively in certified German data centres.

Sharing and storing files securely

Organisations sharing files via FTP today typically have no reliable access concept in place: anyone with server access sees more than they should, and reconstructing who downloaded what after the fact is barely feasible. A modern platform addresses this through browser-based virtual data rooms, where access rights are assigned by person and context, and every activity is logged in an audit-proof manner. Data is encrypted at all times. External recipients need no client for secure file sharing – only a browser. Optional end-to-end encryption is available for particularly sensitive content.

Sending large files securely

Organisations using FTP because email attachments hit size limits will find a direct alternative in FTAPI. Large files can be sent up to multiple gigabytes in size, via browser or directly from Outlook, with four selectable security levels ranging from a secured download link to end-to-end encryption. Users stay in their familiar environment; security runs in the background. Download confirmations provide a complete record of who received the file and when.

Automated data processes

Many FTP processes run fully automatically – as nightly batches or interfaces between systems. These need an equivalent that works encrypted and equally automated. FTAPI maps automated workflows and recurring transfers in a rule-based, encrypted manner, integrated into existing infrastructure via API and standard interfaces. Every process step is traceable and logged, exceptions are flagged – without the IT team having to manage each transfer individually.

In short: organisations moving from FTP to FTAPI meet GDPR requirements structurally rather than through workarounds, reduce the burden on IT teams from maintenance and certificate management, onboard external partners without friction, and gain centralised, audit-proof documentation of all transfers and access events.

Conclusion: replacing FTP – but doing it properly

For organisations transmitting personal data, confidential business documents or compliance-relevant information today, FTP is no longer a viable foundation. The question is not whether FTP should be replaced, but with what – and to what extent.

Switching protocols alone only solves half the problem. Modernising the entire process – with encrypted transmission and storage, well-considered access management and GDPR-compliant operations – turns a vulnerability into a reliable infrastructure.