The security of confidential information during financial and business transactions is crucial. Virtual data rooms allow users to store and share confidential documents in a secure environment. They are generally utilized to conduct due diligence in M&A transactions, but they can also be used for other reasons.
The best VDRs have a variety of features that ensure documents are stored in a secure manner and shared during a deal or the course of. For instance, they can include two-factor authentication, which requires not only a password, but also actual information or codes that are unique to each user. This helps reduce the risk of data breaches caused by compromised passwords. Many VDRs also provide granular access rights that can restrict access to certain files. Another feature is IP restriction, which limits access to a virtual data room to a specific IP addresses. This prevents sensitive information from being downloaded onto non-authorized devices, and can help keep information from being leaked.
Other features that are available on certain VDRs include watermarking, which shows an unchangeable identifier on every document, as well as audit logs, that record the actions taken on documents within the data room. These can be used to identify who has opened or modified files and they can also help in the investigation of data security breaches. Secure spreadsheet viewing is a useful feature. It ensures that Excel files are only accessible by a specific set of users.
When choosing a data storage facility make sure you verify its certifications and standards in order to confirm that it offers the right level of security for your documents. Idealy, it should be PCI DSS Level 1 ISO 9001 / ISO 27001 FIPS 140-2 MTCS Level 3 Some investment banks have an approved vendor list that lists data rooms that they are comfortable working with. Look dataroomanalytics.net/how-does-a-digital-data-storage-work-and-which-features-to-consider for a service that can demonstrate these credentials, along with a good reputation in the business.