FederThe U.S. National Institute of Standards and Technology (NIST) has established the Federal Information Processing Standards (FIPS) publications 140-3 (the current standards) and 140-2 (the legacy standards) to define required information security standards in systems used by the federal government, its contractors and any organization accessing sensitive public data.
To achieve FIPS compliance, a hardware component or software application, such as a file transfer serve,r must undergo validation testing by NIST’s Cryptographic Module Validation Program (CMVP) to ensure that its cryptographic modules meet the required standards. Validation confirms that approved algorithms, key management methods and tamper safeguards meet federal standards for protecting sensitive but unclassified data. Examples of these standards include using only AES, SHA-256 and RSA encryption algorithms at approved key lengths, plus event logs that record every session, configuration change, access attempt and allowing administrative access solely through authenticated channels.
Any federal agency, contractor or third-party user that works with sensitive public data must do so using a FIPS-compliant system, and software and hardware vendors pursue validation to win federal contracts and pass industry audits. Purchasers can verify a system’s FIPS compliance by searching for the certificate number on the CMVP’s website. FIPS compliance has become a global information processing security standard, and by selecting a compliant platform, security teams shorten due diligence cycles and gain a defensible posture that aligns with executive risk and governance objectives regardless of regulatory requirements.
FIPS-compliant security requirements
A file transfer deployment must meet strict physical, technical and procedural requirements to be validated as FIPS-compliant. These requirements include:
- Audit logs that capture module lifecycle events and are reviewed per policy
- Keys that are made by approved random generators and stored in protected memory
- Role-based administration that uses multifactor authentication over encrypted channels
- Use of encryption algorithms approved in the FIPS standards
- Startup and on-demand self-tests that halt service on any failure
Meeting these requirements gives auditors clear proof of security rigor.
Benefits of using FIPS-compliant tools
Selecting FIPS-compliant file transfer software benefits operational security and compliance teams alike. Beyond contract technical requirements, the benefits of using FIPS-compliant tools include:
- Ability to extend system life by aligning with the current FIPS 140-3 revision path
- Ability to immediately demonstrate security compliance in sensitive data environments
- Faster incident forensics time with predictable log formats and tamper checks
- Reduce vendor vetting cycles since validation is documented by NIST
- Use of uniform cipher suites across legacy SFTP, FTPS and HTTPS endpoints
These benefits empower IT teams to move sensitive data with speed, confidence and audit clarity.
Mandatory FIPS compliance
FIPS compliance is mandatory for any U.S. federal agency, its contractors, its service providers and any other organization that handles sensitive data or protected information in the administration of a federal program.
Examples of types of organizations that typically follow mandated FIPS compliance guidelines are:
- Cloud services pursuing FedRAMP moderate or high authorization
- Department of Defense platforms that are subject to DoD Instruction 8500.01 and STIGs
- Executive branch systems that are governed by FISMA and OMB Circular A-130
- Healthcare clearinghouses working with CMS data under the Blue Button initiative
- State agencies using federal grant funds that reference NIST SP 800-53 controls
Meeting these FIPS compliance mandates protects funding and keeps sensitive traffic online.
Other FIPS standards
While FIPS 140-3 validates the full cryptographic module, other Federal Information Processing Standards govern the individual algorithms and processes used by file transfer services.
Other FIPS compliance standards are:
- FIPS 180-4: Defines the SHA family used for file integrity checks
- FIPS 186-5: Governs RSA and ECDSA keys that guard server identities
- FIPS 197: Specifies AES, the default block cipher for SFTP and HTTPS data channels
- FIPS 198-1: Outlines HMAC calculation for session authentication
- FIPS 202: Introduces SHA-3 functions planned for post-quantum resilience
Understanding these references allows IT teams to map every control in an MFT or FTP stack to a published and vetted standard.
FIPS compliant FAQS
A system is FIPS compliant when its cryptographic module has been validated by the NIST CMVP under one of its approved standards, such as FIPS 140-2 or 140-3. Once this validation confirms that approved algorithms, key generation methods, self-tests and physical protections meet federal security requirements, the module then receives a public certificate number on the NIST list.
For MFT or FTP software, compliance limits operation to certified cipher suites, enforces approved key lengths, logs every security event and blocks unvalidated libraries. IT teams rely on this certificate because it shows that data in transit and at rest are processed under a rigor accepted across civilian and defense agencies.
Federal Information Processing Standards (FIPS) are rules from the U.S. National Institute of Standards and Technology (NIST). Each document covers security methods, data formats and operating steps for various information security requirements required by U.S. federal law.
In MFT and FTP software, FIPS mainly refers to FIPS 140-2, which will soon be deprecated, or FIPS 140-3, which is the current standard. These standards explain how a cryptographic module is built, tested and maintained. A file transfer server that claims FIPS validation has been confirmed by a third party to use approved algorithms and key lengths to encrypt its data. FIPS validation can be confirmed by searching the application’s certificate number on CMVP’s website.
FIPS compliance is mandatory for any U.S. federal agency, its contractors, its service providers and any other organization that handles sensitive data or protected information in the administration of a federal program.
State programs backed by federal grants must also follow this rule. Private firms tend to mirror this standard to satisfy auditors or trade data with government partners. Hospitals, payment networks, power utilities and air traffic systems also cite FIPS validation to prove their encryption meets industry-specific data security regulations.
The terms can be considered synonymous in most, but not all, cases.
FIPS certified means the cryptographic module has completed a formal evaluation at an NIST-accredited lab and holds a published certificate number on the NIST validation list. That certificate confirms the module passed every required test under FIPS 140-2 or FIPS 140-3 standards. FIPS-certified solutions can also claim that they are FIPS validated.
FIPS compliant can be another way of stating FIPS validation or certification, but it can also refer to certain circumstances, such as:
– The module has not yet been through or finished the FIPS validation process but states that it follows the technical requirements. Procurement teams may
accept a compliant status during evaluation, but federal production workloads usually require the full certificate before deployment.
– The module itself is validated but is used in an environment that combines other solutions. For example, a secure file transfer application like Cerberus FTP Server by Redwood is FIPS validated, but it cannot warrant the physical security of the server hardware on which it’s installed.
