The Role of Security in a Virtual Data Room


Cybersecurity remains to be the biggest challenge for businesses even after revolutionary advancements in data management solutions. One of the biggest reasons behind data thefts is the usage of unsafe data sharing routes like emails and free data sharing platforms like Dropbox.

Virtual data rooms provided much-needed relief to the global business community by offering high-end and secure data management services. Online data room software has been in the market for over a decade, but it was mostly used for M&A transactions. However, the Covid-19 era allowed businesses to uncover the benefits of a virtual data room in every sector.

Data rooms are highly recognized for their impeccable security. Data room software provides data security second to none, thanks to its multidimensional security features. Read on to learn more about virtual data room security.

What is an electronic data room?

An electronic data room, in the simplest of terms, is a digital platform specifically developed for businesses and professionals to store, share, or manage confidential corporate or personal documents.

Data rooms are basically cloud-based repositories with a wide range of communication tools. That said, using a virtual data room, businesses of all types can manage their data storage and sharing while their employees can communicate on the same platform. Not many data storage platforms offer such a resourceful combination.

What makes online data room software from its alternatives is its usage for large-scale business transactions. The financial sector has been using virtual data rooms for mergers and acquisitions. Which is considered one of the most data-sensitive transactions. 

Apart from that, data room software is regularly employed for fundraising, strategic business partnerships, joint ventures, capital asset acquisitions, and real estate deals. 

Read on to learn more about online data room software here:

The role of security in virtual data rooms

Data security is the backbone of any virtual data room — its biggest selling point. Businesses, firms, corporations, nonprofits, professionals, and government institutes primarily use VDRs because of their security. Here is how online data room software protects protection at different levels.

1. Physical security

Before moving to the intangible security features of the virtual data rooms, let’s have a look at physical security features in VDRs.

  • Disaster recovery. Virtual data room providers maintain digital copies of your documents at remote data centers, making your data disaster-proof.

  • Servers installed in multiple locations. Any high-quality data room vendor has servers installed in multiple locations. That means even if one server experiences any issue, it won’t affect your documents.
  • High-end hardware. VDR vendors use premium quality hardware that has 99.95% uptime.

2. Virtual data room security

Apart from physical security features, data rooms have unparalleled intangible security features that keep the data room safe from internal and external threats.

  • Two-step authorization. It is a basic virtual data room feature (two-step process) that restricts hackers and unauthorized users from getting access to the data room. Any legitimate user logs in through a secret password and one-time code (generated temporarily at every login attempt).

  • Device deletion. Virtual data rooms also provide remote device removal options. The administration can purge any device logged into the data room and remove it without warning. Device deletion or remote wipe features become very handy in case of device theft or loss.

  • Time-based access. Data room management can schedule user access as per its requirements. That said, VDR administrators can limit user access for a specific time period.

  • Audit logs. Audit logs or audit trails are detailed audit reports of virtual data room activities. The management can know and track the actions of all data room users. Audit logs provide minute-by-minute details of anything happening in the VDR.

3. Document security

If data room security is not enough for your satisfaction, have a look at the document security features.

  • Document access restrictions. Any user can be restricted from accessing a folder, document, file, or even a page. The administration can apply this to multiple users at the same time. Document access limitations are very effective during third-party dealings.

  • Remote shred. Although it is not really common, some of the best data rooms allow you to remove or delete any VDR document even if one or multiple users have already downloaded it. Apart from that, any document can be removed from users browsing history.

  • Fence view. The fence view is a remarkable feature for external transactions. It allows you to debar anyone from scanning virtual data room documents.

  • Digital watermarks. If any user wants to claim copyrights on their documents, they can add digital watermarks. These watermarks can easily track the file creator and any changes made after its creation. However, not all data room services boast this amazing feature.

Final words

Apart from their ease of use, remote access, and up-to-date communication channels, virtual data rooms are known best for their security features. It is safe to say that physical, data, and document security is what pushes businesses to use virtual data room software in the first place.

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