Managed file transfer (MFT) vendors often highlight security as a key differentiator between MFT and traditional file transfer solutions. With their vast array of enterprise-grade security controls, MFT solutions are understandably more capable of protecting data and file transfer workflows. But are all these controls truly necessary?
Are file transfer environments genuinely at risk of a data breach or any cyber attack to warrant a heightened level of security? Or are these threats simply fear, uncertainty and doubt (FUD), and these extensive security capabilities overkill? In this post, we’ll take an objective approach to determine the real risks associated with file transfers. We’ll examine the file transfer threat landscape, including real-world data breaches, business consequences and attack vectors.
By the end of this post, you will have a clearer understanding of the actual risks associated with file transfers and whether the extensive security controls integrated into MFT solutions are truly needed.
Many business file transfer systems move, process and store thousands or even hundreds of thousands of files every day. These files may contain sensitive data, including personally identifiable information (PII), financial data and intellectual property. Hence, they’re valuable not only to the organizations that use them but also to cybercriminals. It’s not at all surprising for file transfer systems to be subjected to cyber attacks.
In fact, several file transfer systems have been compromised in the last couple of years. Without going into specifics, one data breach impacted hundreds of thousands of individual records, while another affected tens of millions.
Data breaches in these orders of magnitude can be extremely costly. The moment you discover a breach, you’ll have to execute incident response protocols involving containment, remediation and investigation. These operations require substantial human and financial resources and often disrupt normal business operations, further driving up costs. There are several post-data breach costs as well.
For instance, if you’re in the healthcare industry and you operate in the United States, you may be subject to the Health Insurance Portability and Accountability Act (HIPAA). This means you’ll have to carry out data breach notification operations. This mandatory public disclosure can cause reputational damage. As part of your reputation management efforts, you may have to offer complimentary credit monitoring services. Again, this would add another layer of expense.
In some cases, you may have to pay regulatory fines and penalties. And, in a worst-case scenario, you may also have to face expensive lawsuits. According to the 2024 Ponemon/IBM Cost of a Data Breach Report, the average cost of a data breach is now USD 4.88 million. That’s a 10% increase from last year.
In order to mitigate file transfer-related data breaches, you need to be aware of the threats that are most likely to impact file transfer environments. In this section, we’ll dive a bit deeper into the key characteristics of specific cyber threats that can compromise these environments.
A zero-day exploit is an attack vector in which an attacker takes advantage of a vulnerability caused by a software bug that the software vendor has not yet patched or, in some cases, is not even aware of. As long as a zero-day vulnerability remains unpatched, threat actors can exploit it as an entry point into your system.
Since zero-day exploits are attacks against vulnerabilities in the file transfer software itself, you have limited options for addressing them. The best defense against this threat is to ensure your software vendor institutes appropriate countermeasures. You can start by verifying whether:
Identified in the 2024 Cost of a Data Breach Report as the most commonly used initial attack vector for data breaches, credential theft — a.k.a. stolen or compromised credentials — is designed to obtain user account credentials, such as passwords. User-initiated file transfers typically use passwords for authentication, so they’re highly susceptible to this type of threat.
Threat actors may obtain passwords by directly compromising users through phishing, social engineering, keylogging and other user-targeted cyber attacks. Others purchase stolen credentials in bulk from darknet market sellers, who often source this type of contraband from previous data breaches.
You can mitigate credential theft-based attacks by implementing the following best practices:
In this type of attack, threat actors may eavesdrop on a file transfer connection to steal sensitive data. For example, they may steal a user’s username and password. Once they have stolen credentials, attackers may use those to gain unauthorized access to your file transfer system.
You can easily counter man-in-the-middle attacks by shifting from unencrypted file transfer protocols, such as File Transfer Protocol (FTP) and Hypertext Transfer Protocol (HTTP), to encrypted protocols, such as File Transfer Protocol Secure (FTPS), Secure File Transfer Protocol (SFTP) and Hypertext Transfer Protocol Secure (HTTPS).
The risk of data breaches in file transfer environments is undoubtedly real, as evidenced by documented incidents as well as the presence of impending threats, such as zero-day exploits, credential theft and other attack vectors. These threats highlight the critical need for robust security measures. The extensive security features of MFT solutions are, therefore, not overkill. Rather, they are essential for protecting your file transfer workflows and sensitive data from these cyber risks.
Discover how to identify hidden risks, learn from real-world breaches and choose an MFT provider that prioritizes robust security. Get the guide now to protect your data.