Secure storage of confidential data is essential during business processes and transactions. Virtual data rooms permit users to keep and share private documents in a controlled setting. They are typically used to perform due diligence in M&A transactions, but can be utilized for other reasons.
The most effective VDRs have a variety of features that ensure documents are stored in a secure manner and shared during a deal or a process. They could, for instance include two-factor verification, which requires that not only the password is utilized, but also actual information and codes specific to each user. This reduces the risks of data breaches as a result of compromised passwords. Many VDRs offer granular permissions that restrict access to certain files. IP restriction is another feature that restricts access to virtual data rooms to specific IP addresses. This prevents sensitive data from being downloaded onto unauthorized devices, and can help keep information from being leaked.
Other features offered on certain VDRs include watermarking, which provides an immovable identifier for each document, and audit logs, which record every action on files within the data room. These logs are useful in determining who has accessed and modified which files, and may aid in the investigation of data breaches. Other features that are beneficial include secure spreadsheet viewing, which makes sure that data in Excel files can only be viewed by specific users.
When choosing a data storage facility be sure to verify its certifications and standards to confirm that it has the right level of security for your documents. The ideal situation is PCI DSS Level 1 ISO 9001 or ISO 27001 FIPS 140-2 MTCS Level 3. Some investment banks have a list of approved vendors that lists data rooms they are willing to work with. Look for a service that has these credentials and has a good reputation within the industry.
