Dealmakers rate virtual data rooms highly for multiple reasons. For example, data room software provides one single platform to unite all parties involved in dealmaking. It simplifies data sharing and management while its communication tools bring diversity.
However, above all that, one thing that makes data room software a better option is the level of security it provides. A virtual data room is no less than a safe haven, and the chances of security breaches are negligible if you hire reliable data room providers.
Virtual Data Rooms Explained
Virtual data room solutions are secure, cloud-based data management tools that different types of organizations and individuals use to safely share and store sensitive information.
The word “solution” means that VDRs provide everything needed for complex transactions like IPOs, M&As, crowdfunding, and even board collaboration.
Organizations or individuals can use data room technology for virtual collaboration, online meetings, document sharing, or even create a complete online workplace for teams.
Virtual Data Rooms—Unparalleled data protection
As mentioned above, one key element that makes data rooms a preferred option is its flawless security system.
“VDRs security system is insanely well-developed. If an intruder somehow manages to get a login password, they still need a secret code—thanks to multi-factor authorization. Then, you can control who sees, access, or share data. You can remove any file literally any minute. Stealing data from a secure VDR? Well, that looks like mission impossible,” says Ronald Hernandez – Founder of data room-providers.org.
Data security has earned this technology a fair share in dealmaking. It ensures enhanced due diligence as users can freely and safely share and access documents in real time. Let’s have a deeper look at data room security features.
End-to-End Encryption
Data in virtual data rooms is usually encrypted during transfer and while stored. This means documents are protected both when they are being sent and when they are stored on the server.
Encryption helps stop unauthorized people from accessing the documents, even if there is a breach in the server.
End-to-end encryption is a security method that ensures only the person who is meant to receive the data can read it. It prevents hackers or service providers from intercepting or reading the content.
Remote Shredding
Many virtual data room providers use Information Rights Management (IRM) technology to give administrators control over documents shared with others.
Protected documents are encrypted using AES-256-bit encryption and can only be opened by users with the right access. This means administrators can “shred” documents remotely.
In simple terms, they can revoke a user’s permission to open a document, even if the user has already downloaded the file to their device.
Secure Printing
Some data rooms offer a “Secure Print feature” that lets users print documents on physical printers while blocking them from printing to PDF. This adds extra security because printing to PDF is like creating a digital copy of the document, which could be saved and shared easily.
Multi-Factor Authentication (MFA)
One of the best ways to prevent unauthorized access is multi-factor authentication. If a data room has this feature, users must provide two or more types of verification before accessing the VDR.
This might include a one-time secret code, or the VDR may ask some questions related to the user’s information. Multi-factor authentication makes it harder for someone to access the account, even if they have the user’s password.
Watermarking
Datarooms also offer features like dynamic watermarking, which adds unique information to documents.
These watermarks can include details like the user’s email, IP address, current date, and time. The watermark is placed diagonally across the page or screen so it does not interfere with reading the document.
Watermarks show that the document is confidential. As users can add their identity, watermarks act as a warning against sharing the document with unauthorized people.
It is highly recommended to look for maximum data room security features when you compare virtual data room solutions.
Benefits of Virtual Data Rooms
How beneficial virtual data rooms are? Apart from imperial security features, here is how data rooms help the business world.
Makes collaboration Easier
It is needless to say that collaboration is vital in business. A data room makes it easier by providing a central platform for teams, partners, and clients to access and work on documents together. This reduces the need for meetings and emails, which saves time and boosts productivity.
VDRs have tools for version control, commenting, and annotation, etc. These features improve teamwork and prevent miscommunication.
Secure messaging and Q&A features keep conversations organized and safe. They can also integrate with other productivity tools to streamline workflows.
Cost-Effectiveness
Traditional data management is expensive and time-consuming. Virtual data rooms eliminate the need for physical file rooms, printing, and shipping documents, saving businesses money.
Online data room software reduces costs by cutting the need for paper, ink, and courier services. Time-saved searching for documents is also a form of cost savings, as it allows users to focus on other important tasks.
Regulatory Compliance
Businesses in regulated industries need to follow strict laws. Online data rooms help by offering secure document storage, audit trails, and access controls.
These features ensure businesses can meet regulatory requirements from organizations like ISO, FINRA, and GDPR.
Summing it up
Digital protection is the most prominent feature in virtual data room solutions and its biggest selling point. Data rooms provide multi-layer protection via features like end-to-end encryption, secure printing, document shredding, multi-factor authorization, and document access control.
