Did you know that data breaches in just Q4 of 2024 affected over eight million records across the globe? Data security remained a massive challenge for businesses in 2023 despite unprecedented advancements in cybersecurity.
Yes, one common reason behind these breaches is human error, but not investing in enterprise-grade cyber protection measures also results in data thefts in the corporate sector.
There are different ways to mitigate or at least minimize the risk of data breaches, and using a secure virtual data room is one of them. A modern-day virtual data room features banking-grade security tools that make it virtually impossible for cybercriminals to access sensitive information.
Here is a detailed guide on digital data room security after a brief introduction to the technology.
What is a secure virtual data room?
A secure virtual data room is a certified and compliant online digital document repository for storing and sharing business data. In broader terms, online data room software is a complete corporate solution that mainly offers a wide range of data management tools.
Businesses primarily use digital data rooms for data-sensitive transactions like fundraising rounds, mergers and acquisitions, initial public offerings, and strategic partnerships. VDR has become a prevalent data management tool in the IT sector, M&A industry, health sciences, pharmaceuticals, oil and gas, and law sector.
What makes online data room a standout solution is their all-in-one feature. That said, apart from a comprehensive set of data management tools, virtual data rooms are globally known for their unbreakable security features, collaboration tools, and project management tools.
How online data rooms keep your data safe
Security stands as one of the most important elements of a virtual data room. When considering factors like virtual data room pricing or vendor’s reputation, security should be among the top factors to consider when choosing data room providers.
Virtual data rooms facilitate the M&A due diligence process by providing a secure and organized platform for storing and sharing critical documents, ensuring that all stakeholders can collaborate effectively while maintaining confidentiality throughout the transaction. Check out more information about this process: https://www.idealsvdr.com/blog/ma-due-diligence-all-you-have-to-know/
Here is how data rooms protect sensitive corporate data.
1. Data encryption when data is in transit or rest
Data encryption is not a common feature when it comes to traditional cloud storage. What’s even better in the data rooms is that the data is encrypted when in transit or even at rest, which is not common in other encrypted data storage platforms.
When you go through virtual data room comparisons, look for VDRs with at least 256-bit SSL encryption—the strongest in the world. Such strong data encryption is used by the banking sector and militaries.
2. Complete control over information flow
Online data rooms make sure that businesses have 100% control over their data. It allows them to set clear roles and data access levels for everyone in the room. Here are some remarkable security features in VDRs that ensure a controlled flow of information.
Self-destruct documents
Self-destruct documents feature in VDRs is highly effective when you don’t want the user to copy, edit, share, save, or download any data. What’s more, only users with the passkey can access the file, and once they open the file, the timer starts, and the file is automatically deleted as soon as the time is up.
Document access control
Setting document access for users in the data room software offers a high level of customization. Businesses can set access roles individually or create groups of individuals with similar roles.
For example, they may allow a user to access a specific file in a folder while keeping others inaccessible. Similarly, businesses may allow that user to view a file only without giving sharing, editing, saving, or downloading rights. In a nutshell, the VDR administration can decide who can do what, when, and for how long.
Fence-view
Another remarkable feature, fence-view makes sure data sharing with external parties is fully secure. Using this feature, you can hide/blur any specific segment, paragraph, page, or even a line in the document. Fence-view feature is highly useful for M&As and fundraising.
3. Entry barriers
Data room software employs entry barriers like multi-factor authorization, and only users with the right credentials can go through. This feature requires the virtual data room users to go through multiple identity confirmation steps. The user may have to log in via password and a secret, one-time generated code, or they may have to answer a predefined question. Sometimes, the VDR may ask the users to identify their recent activities if the software detects suspicious login attempts.
Things to Consider When Choosing a Virtual Data Room
When the best data rooms are compared for selection purposes, here is what should be considered.
- Data room security and compliance
- Industry relevant experience
- Customer support service
- Ease of use, user interface, and deployment methods
- Online data room reviews from trusted sources.
- Virtual data room costs and pricing methods.
- Third-party apps integration
- Free trials
Summing it up
Virtual data room software sensitive business data through various features like document access control, multi-factor authorization, document shredding, fence-view mode, self-destruct documents, data encryption, and data backup. Some of the best data room software include iDeals, SecureDocs, and Datasite.
