AWS Transfer Family SFTP Setup (Password + SSH Key Users) Using Lambda Identity Provider + S3

Introduction Even though modern application integrations often use REST APIs , messaging platforms, and event streams, SFTP remains one of the most widely used file-transfer standards in enterprise environments. Many organizations still rely on secure file exchange workflows for batch processing daily reports, data exports/imports, financial reconciliation files, healthcare data transfers, compliance-driven integrations, or vendor-delivered archives. The problem is that running your own SFTP server is operationally expensive. A traditional setup usually means deploying an EC2 instance with OpenSSH, attaching storage, setting up users with strict directory isolation (chroot), configuring permissions, rotating keys, patching the OS frequently, and dealing with scalability or high availability. It works, but it introduces long-term maintenance overhead and security risk especially if the SFTP endpoint is exposed publicly.