A virtual dataroom (VDR) can be described as a digital repository which allows collaboration sharing sensitive information, and protecting it with encryption in a secure environment. VDRs are commonly used by companies to safeguard sensitive information from cyberattacks and unauthorized viewing or downloading, in particular when conducting business transactions that are crucial like M&A deals.
For companies that want to safeguard their valuable intellectual property and proprietary data, the benefits of utilizing a secure VDR outweigh any risks associated with traditional file-sharing options such as cloud storage or email. Data leaks advantages of VDR solutions can cost businesses time and money as well as damage to its reputation The best way to prevent this from happening is to establish a solid security system.
The typical features of VDR security include multi-factor authentication that allows users to verify their identities, granular settings for permissions to restrict access to digital documents or files and audit logs to track file activity. Regular backups of data ensure that the data stored in VDRs is restored if the system fails, or is the victim of a cyber-attack.
Businesses looking to purchase a VDR should select one that is equipped with an industry-leading encryption system that can make sensitive data unreadable during transmission and provide a failsafe in the event that a unauthorized user gains access to a document/file. Advanced security measures, such as MFA or login monitoring to check the IP address, location of the device and user location, can be employed to protect against data breaches and other security violations.
Companies that are regulated by regulatory bodies such as the FCA must also ensure that their VDR provider’s data handling policies are in line with the regulations. This assures that any issues or complaints will be handled fairly and quickly, decreasing the risk of legal problems and damage to the company’s reputation.
