The protection of confidential information is essential in business processes and transactions. Virtual data rooms permit users to keep and share private documents in a secure environment. They are typically used to perform due diligence in M&A transactions, but they can also be used for different purposes.
The best VDRs come with a variety of features to ensure that documents are safe and shared during a transaction or process. For instance, they could include two-factor authentication, which requires not only a password, but also facts or codes that are unique to every user. This helps reduce the risk of data breaches caused by compromised passwords. Many VDRs provide granular permissions to restrict access to particular files. Another feature is IP restriction, which limits access to the virtual data room to a specific IP addresses. This stops sensitive data from being downloaded onto unauthorised devices, and helps avoid leaks.
Other features that are available on some VDRs include watermarking, which provides an unchangeable identifier on every document, as well as audit logs, which track the actions taken on the files in the data room. These can be used to identify who has accessed or modified files, and can be used in the investigation of data security breaches. Other useful features include secure spreadsheet viewing, which ensures that the contents of Excel files can only be viewed by specified users.
Verify the certifications and requirements of the data room to ensure that it has the proper level of security for your documents. It should be PCI DSS Level 1 ISO 9001 / ISO 27001 FIPS 140-2 MTCS Level 3 Some investment banks have a list of approved vendors that offer data rooms that they are comfortable working. You should look for an organization that can demonstrate these credentials and has a good reputation in the industry.