How To Ensure The Security Of Your Virtual Data Room


The location and method of storage and sharing of your secret documents throughout carrying out certain company operations and transactions will determine how secure they are. The most secure approach to guarantee that your data is kept safe throughout M&A, legal proceedings, compliance, or other mission-critical activities is to use a virtual data room outfitted with the necessary tools and capabilities to protect your data.

This essay will highlight the value of using a virtual data room for crucial procedures involving the disclosure of private information to outside parties, as well as how a VDR differs from more traditional document-sharing platforms like Google Drive, Dropbox, and email.

How Do You Share and Manage Your Documents Currently?

The simplicity of the Internet has made document sharing simpler than ever. While the Internet has facilitated quick, easy, and effective communication between several parties located anywhere around the globe, it has also given rise to security and document control concerns for businesses. These dangers may result from little oversights that can’t be prevented, like human error or more serious mistakes that might have been prevented with the correct document sharing software. Your business should think about better options for the protection of confidential information, such as HR documents, third-party contracts, intellectual property, internal financial information, etc., before there is an unanticipated leak, a sensitive document is lost by an employee or a more nefarious hack.

Yahoo, Target, eBay, and Equifax are a few well-known businesses that can attest to the significance of online data security. All of these organizations had security problems that allegedly put customer names, dates of birth, passwords, social security numbers, credit card information, and more at risk. These customers were exposed and hence entitled to compensation, which cost the aforementioned businesses millions of dollars. Furthermore, breaches like these can significantly reduce a firm’s sale price or even scupper a transaction when a company is pursuing a merger or acquisition. If a breach can affect well-known brands like these, then it can affect any company. Thus it’s crucial to identify any flaws in your present way of document sharing and implement appropriate security measures.

Features of a Secure Virtual Data Room

Security should be your first concern whether you’re looking for a VDR for M&A or for other data-sensitive areas. A VDR is simply a cloud-based web hosting service that has been securely encrypted. Therefore you want one that has the highest level of security. You desire a VDR in particular that:

  1. Is the VDR ISO 27081 compliant? This refers to whether the VDR complies with the rules established to safeguard Personally Identifiable Information (PII) in cloud storage. Particularly, ISO 27081 is regarded as the best security option for cloud storage systems (vs. ISO 27001).
  2. Features robust encryption techniques – Encryption is a technique that encrypts data before it is transferred to a cloud storage system. The document may not always be encrypted and secure in the cloud because data going to and from the server is often protected. However, VDRs allow for document-level encryption.
  3. Permits the use of digital watermarking – Digital watermarking is tremendously helpful in preventing the unauthorized duplication of data. Even text, video, and audio may be watermarked digitally. Additionally, it enables you to monitor who is accessing or printing data, preventing information breaches. The greatest VDRs include digital watermarking that is both dynamic and static.
  4. Has extensive options for document rights and view limitations – You want to choose a VDR that enables you to be precise with document permissions and limits. When working together, for instance, you could want a team member to have access to some parts of a document while being blocked from others.
  5. Uses two-factor authentication – Two-factor authentication lowers the risk of password theft and unauthorized access to the data room. You could also be required to provide an extra code or factional information about yourself in addition to your password. Studies show that two-step authentication is more effective than a single password in securing data.
  6. Verify the IP address, kind of device, and location that a user signs in with – Administrators may verify the IP addresses, device types, and locations of all users who log in and send email notifications if any suspicious information is discovered.
  7. Single Sign On (SSO) Integration – SSO is a user authentication solution that enables users to log in with only one set of login information, such as a username and password, and access various apps.
  8. FINRA Compliance – The Financial Industry Regulatory Authority works to safeguard investors by ensuring that the securities sector runs ethically. It provides regulatory supervision and is the biggest independent regulator for all securities companies operating in the United States.
  9. Maintains strong user support – Lastly, you should think about the level of customer service and support the VDR provider offers.
  10. Audit Logs – The audit logs contain thorough analyses and reports on every user, file, and document action occurring inside the room.