When integrating data, the choice between flat-file transfers and APIs depends on business requirements and technical capabilities. APIs are generally more advanced but come with additional costs and challenges.
SFTP is more firewall-friendly and allows for username/password authentication and SSH key-based authentication. However, SSH keys take work to manage and require a robust security framework.
SFTP is an excellent choice for organizations that need to exchange large volumes of data at scheduled intervals or those needing help to afford real-time API integration bandwidth. Moreover, it is more reliable than other data transfer methods because the server can verify that the client is authenticated before sending the requested information. It also offers the option to encrypt the connection to protect against cyber attacks and ensure the confidentiality of transmitted data.
Choosing an integration architecture is a critical decision that should be made carefully. Many companies need to think through their integration needs before using APIs. This approach is often short-sighted, as the right technology is critical to a successful business. For example, some companies have highly customizable systems that change field names and itemize their accounting transactions in a way that is not compatible with standard API integration tools.
The right choice for your organization will depend on how customizable your systems are and what you need to do with the data you receive. SFTP vs API is two different technologies with unique strengths. However, each is a viable choice for specific business applications. If you understand your integration needs clearly, deciding which solution is right for you will be easier. If you are still determining your integration needs, consider consulting with experts to help you make the best choice for your business.
In addition to SFTP, several other ways exist to exchange data between systems. The best choice will depend on your specific business needs and technical capabilities. SFTP offers a simple and secure solution for batch data transfer, while APIs offer more flexibility and real-time data exchange. However, it is essential to consider your current and future business needs when choosing a data transfer method.
For example, if you’re a retailer that needs to send your inventory updates to an ERP, you can use flat-file integration via sFTP or FTPS. This method uses a secure mailbox where the integration platform drops a letter for each sFTP session into an agreed-upon folder. The ERP can then pull the letters from the mailbox and process them. However, this type of integration will always be slower than an API solution. While mitigating this slowdown using listening triggers in the sFTP is possible, this approach will always have a natural time barrier.
Another option is integrating through a cloud-based serverless solution that offers a web UI, APIs, and cloud storage that supports popular protocols. This highly scalable solution can handle thousands of concurrent sessions, with webhook notifications to help you process changes in real-time. It also supports using custom formats to meet customers’ needs with unique schemata, which helps reduce friction and adoption.
While SFTP is an effective data exchange solution, it can be costly to scale. This is because scalability issues can arise when an SFTP server is overloaded with concurrent requests. Using a network load balancer to distribute requests to multiple servers can help solve this issue, but it is not the only option. Fortunately, several scalability-oriented solutions are designed to handle high loads without breaking down.
A key benefit of APIs is their scalability. Unlike file exchanges, APIs can be implemented flexibly to support various business needs. They also allow for real-time communication between systems, which can be helpful in several ways. For example, they can sync benefits administration software and insurance carriers to enable fully digital group applications, instant insurance verification, and automatic updates during open enrollment.
Lastly, APIs can be accessed from various operating systems and programming languages, making them more scalable than SFTP. Furthermore, they can be easily integrated into existing applications and services. This makes them an excellent choice for companies that need to integrate with 3rd party apps, which can be more complex and expensive to build than a simple file exchange.
While APIs are the preferred integration methodology for tech companies, there are many reasons why businesses might still be using SFTP. These include legacy systems, a lack of resources, or the need to keep costs low. It is essential to consider these factors before deciding which integration method to use.
SFTP is easy to set up and provides a good solution for bulk data transfers. However, it is unsuitable for real-time transactions and doesn’t support data validation. It also does not provide a way to notify clients of changes in real-time. If the file is updated regularly, it may become updated. This can lead to several issues, such as human errors or missed deadlines.
Another issue with SFTP is that it does not provide an asynchronous communication model, which means that updates must be manually submitted. This can be costly, mainly when a business receives large files regularly.
When deciding between flat-file and API integration, it’s essential to consider the flexibility that your customers will require. Some requirements, such as scanning invoices or storing sales data in a specific format, lend themselves well to flat-file processes. This can help reduce friction and increase adoption while reducing the risk of technical debt. However, an API is better if you need a more flexible system to accommodate different schemata.