A company uses an AWS Lambda function to transfer files from an Amazon S3 bucket to the company's SFTP server. The Lambda function connects to the SFTP server using a username and password stored in Lambda environment variables. A developer must store these credentials in encrypted form. Which solution satisfies this requirement?

Storing sensitive information like SFTP credentials directly in Lambda environment variables is not secure, as they are visible in the Lambda console and API calls. AWS Systems Manager Parameter Store provides a secure, scalable, and auditable way to store configuration data and secrets, including passwords, as encrypted parameters. Lambda functions can then retrieve these parameters at runtime using an IAM role, ensuring the credentials are never exposed in plain text. IAM database authentication is irrelevant here as the SFTP server is external and not an AWS database. Storing credentials directly in AWS KMS is not the primary use case; KMS is for encryption keys. While KMS encrypts data, Parameter Store is designed for storing and retrieving secrets securely. Storing credentials in an encrypted .txt file in S3 is less secure and manageable than Parameter Store, as it requires manual decryption and management of the encryption key.