Is SFTP Compliant? Its Role in HIPAA, GDPR, SOC 2, DORA Compliance

Is SFTP compliant with data protection laws?

SFTP (SSH File Transfer Protocol) is not a compliance framework, but it can certainly support regulatory requirements when implemented securely. When used with proper authentication, logging, and access control, as is the case with certain managed SFTP solutions, SFTP helps organizations meet technical safeguards under HIPAA, GDPR, SOC 2, and DORA. 

This article outlines the role of SFTP in compliance frameworks, covering HIPAA, GDPR, SOC2, and DORA specifically, and what supportive features and configurations need to be applied in conjunction with it to ensure compliance in regulated data environments. We also discuss managed cloud SFTP solutions that incorporate these features and methods to make maintaining compliance easier.

Is SFTP secure?

Yes—when properly configured, SFTP is a highly secure method of transferring files over a network. It encrypts both the data and associated metadata using SSH, preventing interception or tampering in transit. Security is further bolstered through support for key-based authentication, user access restrictions, and detailed logging. However, the overall security of an SFTP deployment depends on correct server configuration, access management, and monitoring practices.

It’s important to note that compliance-focused MFT solutions come equipped with these fortifying features as well as expert support to assist in proper configuration and maintenance of compliant SFTP transfer frameworks. Explore our recent content for more about MFT and compliance with HIPAA, GDPR, and DORA.

Why secure file transfer is essential for compliance

Regulations like HIPAA, GDPR, SOC2, and DORA require more than secure storage; they mandate the protection of sensitive data during transmission. Many organizations use file-based workflows to move sensitive data between systems, vendors, and regulators. These workflows must be encrypted, access-controlled, and auditable, both in transit and at rest. 

SFTP is widely adopted in regulated industries because it encrypts data in transit, limits access to authorized users, and generates activity logs for auditing. It remains one of the most secure data transfer protocols available today, along with FTPS, and HTTPS. When considering managed file transfer solutions (MFTs), we recommend options that support all of these protocols, as well as secure storage protocols like S3 for data at rest.

How SFTP works and why it’s suitable for compliance

SFTP, a.k.a. SSH File Transfer Protocol,  is a secure method of transferring files over an encrypted SSH connection. It provides a set of built-in safeguards that align with regulatory expectations for data confidentiality, access control, and monitoring.

Key features of SFTP include:

• Encryption of the entire channel between client and server: This encompasses both file contents and commands.
• Secure authentication options: SFTP supports SSH key-based authentication, strong passwords, and integration with multi-factor authentication, but these can only be enforced through additional configuration or as part of a comprehensive managed solution.  
• Access control capabilities: Permissions can be scoped to individual users, groups or path-level restrictions, depending on the operating system and file system 
• Logging and traceability: Most SFTP servers, such as cloud SFTP servers managed by SFTP providers like SFTP To Go, support audit logging of session starts, file transfers, and failed login attempts.
• Firewall compatibility: Uses a single port (typically 22), reducing the complexity of firewall rules.

These properties make SFTP well suited to environments where file-based workflows must be tightly controlled and logged.

How SFTP addresses common compliance challenges

In this and in the following four sections, it’s important to note that:

SFTP by itself (meaning the protocol only) does not:

• Manage users: User accounts and permissions must be managed externally through the underlying operating system or integrated authentication systems (such as with an MFT).
• Provide audit logs or session histories without configuration: While SFTP can generate logs, central audit logging or session history tracking requires additional configuration or integration with external monitoring tools.
• Support regional hosting: The SFTP protocol doesn’t include features for specifying or enforcing data residency in particular geographic regions. Achieving regional hosting means deploying SFTP servers in desired locations or using managed services that offer this capability.
• Offer high availability: SFTP doesn’t natively support high availability or failover mechanisms. For that, you’ll need additional infrastructure setup, such as load balancing and redundant server configurations.
• Provide integrated monitoring: SFTP lacks built-in real-time monitoring features. Monitoring SFTP activity in real-time requires  external tools or services that can track and alert on file transfer activities.

Those are generally features of managed SFTP platforms (not all solutions, only the better ones), not the protocol itself. 

In fact, the only compliance point handled by the protocol is that of encryption during transit. Most data-regulatory frameworks impose similar expectations on how data must be transmitted. These can be grouped into the following categories:

SFTP helps address these requirements when deployed as part of a secure, policy-aligned environment. MFT solutions, particularly those that are compliance-certified or compliance-focused, assist in the setup of these environments by covering numerous compliance bases in one solution. Meaning, the right managed SFTP solution will support compliance with the above requirements, but SFTP alone will not.

1. HIPAA compliance and the role of SFTP

HIPAA’s Security Rule includes several technical safeguards that apply directly to file transfers. While HIPAA doesn’t mandate the use of specific protocols, SFTP can help fulfill key requirements when used correctly, as part of a broader security framework, such as through SFTP To Go. 

SFTP is commonly used to transfer lab results, claims data, and other PHI between covered entities and vendors under HIPAA-compliant workflows.

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2. How SFTP contributes to GDPR-compliant transfers

Under the General Data Protection Regulation (GDPR), organizations must implement appropriate technical and organizational measures to ensure a level of security appropriate to the risk. SFTP via compliant MFT contributes to GDPR objectives by enabling secure, region-specific file transfers and supporting encryption and access logging:

SFTP is often used by processors and controllers exchanging personal data with vendors or subsidiaries across EU member states.

3. Aligning SFTP with SOC 2 Trust Services Criteria

SOC 2 evaluates internal controls related to customer data using the Trust Services Criteria (TSCs). Managed SFTP solutions can support several of these criteria by enabling secure data handling.

In SOC 2 Type II audits, SFTP activity is typically monitored continuously and integrated with broader system logging platforms.

4. SFTP and DORA, meeting EU financial resilience expectations

The Digital Operational Resilience Act (DORA) requires financial organizations and ICT providers in the EU to ensure security and traceability in their digital operations, including third-party data exchanges.

SFTP supports DORA’s operational and security mandates when used as part of a compliance-focused security framework, as follows:

Cloud SFTP solutions like SFTP To Go are suitable for secure interbank communications, regulatory reporting, and secure file exchanges with vendors.

Best practices for secure, compliant SFTP deployment

Implementing SFTP securely is critical to its effectiveness in meeting compliance goals. While managed cloud SFTP solutions can provide these added controls, which would otherwise be challenging and constantly to enable, it still falls to your administrator to ensure proper configuration and upkeep of your SFTP settings. Key best practices include:

• Authentication: Use SSH keys, with optional multi-factor authentication. Avoid relying on passwords alone.
• Access Restrictions: Assign users only the permissions necessary to complete their tasks. Restrict access to specific directories or file types.
• Audit Logging: Enable session, file access, and error logs. Integrate logs with centralized monitoring systems for visibility.
• Key and Credential Management: Rotate SSH keys regularly. Remove unused accounts or stale credentials.
• Secure Configuration: Disable legacy ciphers and enforce strong encryption settings.
• Data Residency Controls: Choose server locations based on regulatory requirements for data localization.

These measures help ensure that the SFTP environment supports confidentiality, integrity, and auditability. SFTP To Go’s acclaimed support team is always on hand to assist you with environment and workflow specific configuration advice.

Real-world SFTP use cases in regulated environments

SFTP is widely used in data-regulated industries where secure, auditable file transfer is a routine requirement. Common scenarios include:

• Healthcare: Transferring medical imaging, lab results, and billing records between providers and vendors.
• Financial Services: Delivering transaction reports and audit logs to external partners or regulatory bodies.
• Legal and Compliance: Secure submission of policy documents or evidence files to external parties.
• Education: Sharing student transcripts, enrollment files, and research datasets across institutions.
• Technology: Moving application logs, telemetry data, and automated build artifacts between environments.
• Retail: Exchanging inventory reports, supplier files, and POS data with third-party systems.
• Professional Services: Sending project deliverables, contracts, or client reports via secure, auditable channels.
• Data Backup: Sending encrypted file snapshots to offsite cloud storage while preserving geographic control.

These workflows benefit from services like SFTP To Go’s support for encryption, fine-grained access, and straightforward audit logging.

Benefits of using managed SFTP services for compliance

Running SFTP infrastructure in-house can be costly and complex. Managed SFTP solutions therefore lower costs, reduce error, and they take the complexity out of various aspects of data compliance. While we’ve already detailed the benefits of such solutions in early sections, let’s summarize how selected managed cloud SFTP services can also reduce operational risks:

• Secure configuration by default: When the environment is already set up with safe encryption and access settings, there’s less chance of mistakes during setup, reducing the risk of exposing sensitive data through misconfiguration.
• Control over user access and activity logs: Being able to restrict each user’s access and track what they do makes it easier to prevent unauthorized access and investigate issues quickly, reducing the risk of internal misuse or undetected breaches.
• Reliable availability: Built-in redundancy and failover mean the service can keep running through outages or hardware failures, minimizing downtime and avoiding the operational risks tied to lost transfers or delayed data delivery.
• Choice of data storage region: Selecting where data is hosted helps meet location-based legal requirements and avoid penalties tied to non-compliance with regulations like GDPR and DORA.
• Built-in automation and alerts: APIs and webhooks reduce reliance on manual processes, which lowers the risk of human error, and enable faster responses to failures or suspicious activity.

Managed services like SFTP To Go are often adopted by healthcare SaaS platforms, fintech products, and other compliance-focused teams that need secure file exchange without the burden of server maintenance. 

Related technologies: when to use FTPS, HTTPS, APIs, or S3

While SFTP is often the first choice for secure file transfer, related technologies can also serve specific compliance needs:

• FTPS: Suitable when TLS-based encryption is required. FTPS encrypts both command and data channels using SSL/TLS. However, it requires multiple ports, which can complicate firewall configurations. Check out FTPS vs. SFTP benchmarks here.
• HTTPS Upload Portals: Suitable for collecting documents from users via web interfaces. Designed more for manual operations and administration.
• APIs: Best for application-to-application transfers with built-in authentication, validation, and control.
• Amazon S3: Combines highly reliable object storage with a robust API for uploading, downloading, listing, and deleting files. Commonly used as a secure backend for SFTP workflows, offering features like server-side encryption, access logging, and lifecycle management.

Organizations often use SFTP for delivery, and S3 or similar storage for long-term archival under compliance policies. Managed cloud SFTP solutions like SFTP To Go incorporate all of the above, along with all the other MFT benefits to deliver well rounded solutions that tick a range of regulatory checkboxes. 

Conclusion: Why SFTP is a trusted tool in compliance strategies

SFTP is not a compliance solution by itself, but it does enable secure, traceable, and access-controlled file transfers that align with the requirements of HIPAA, GDPR, SOC 2, and DORA. Its flexibility, encryption, and compatibility with audit practices make it a preferred method for moving sensitive data securely between systems.

Organizations with regulatory obligations continue to rely on SFTP as part of their technical control frameworks for file-based workflows. This article has explained how, to reduce risk, save resources, and avoid compliance snags, SFTP is best used as part of a comprehensive compliance and security framework such as can be found ready-to-go in managed (MFT) SFTP solutions like SFTP To Go.

About SFTP To Go

If you're building a secure file transfer process, managed platforms like SFTP To Go offer hosted SFTP with access controls, audit logs, API integration, and regional hosting support, ready to support compliance out of the box.

SFTP To Go is a fully managed SFTP transfer and storage platform designed to support compliance-driven organizations. It provides:

• Secure SFTP access with SSH encryption: All files and metadata are encrypted in transit, aligning with HIPAA, GDPR, SOC 2, and DORA transmission security expectations.
• Access control: Configurable user permissions and isolated directories ensure only authorized access to sensitive data.
• Built-in audit logging: Connection activity and file operations are logged and exportable, supporting audit readiness for HIPAA, SOC 2, and DORA.
• Regional hosting options: Customers can select specific data regions to address GDPR and DORA data residency requirements.
• Cloud storage integration: S3 storage supports long-term archiving and secure data handling.
• API and webhook capabilities: Automate file transfers and trigger workflows on file upload or download, useful in regulated, event-driven architectures.

SFTP To Go is frequently used by healthcare platforms, fintech tools, and compliance-heavy businesses that require secure, hands-off file transfer and storage without the need to manage infrastructure.

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