Security of confidential information is essential during business processes and transactions. Virtual data rooms allow users to store and share private documents in a safe environment. They are commonly employed to perform due diligence in M&A transactions, but can also be used for other purposes.
The top VDRs include a variety of features that ensure documents are stored in a secure manner and shared during a deal or the course of. They could, for instance include two-factor authentication, which requires that not just the password is utilized, but also actual data and codes that are unique to each individual user. This minimizes the risk of data breaches caused by compromised passwords. Many VDRs provide granular permissions to restrict access to specific files. Another feature is IP restriction, which restricts using a virtual data room for deal room management access to a virtual data room to specific IP addresses. This helps protect sensitive information from being downloaded to unauthorised devices and prevents leaks.
Other features offered on certain VDRs include watermarking, which provides an unchangeable identifier on every document, and audit logs, that record every action on the data room’s files. These can be used to identify who has accessed or modified files, and can also aid in the investigation of data breach. Other features that are beneficial include secure spreadsheet viewing, which makes sure that the contents of Excel files can only be viewed by specified users.
When you select a data space make sure you verify its certifications and standards to verify that it offers the right level of security for your documents. Ideally, it will 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 lists data rooms that they are happy to work with. Find a company that has these credentials as well as a strong reputation in the business.
