Data security is paramount for virtual data rooms which offer a highly secure virtual space for sharing documents, most often of a financial, business, or legal nature. Depending on how the data room is used, secure data is accessed by the parties remotely from various locations, or the company may prefer to use the virtual data room as a corporate data repository.
To keep data secure, VDRs use both physical and virtual security features, ranging from perimeter security at data centers or setting up document access rights for data room users. Most recently, VDRs have emerged in popularity as a way of secure data sharing which eliminates the need for traveling to some distant physical location to examine the documents in order to negotiate a deal, and also eliminates any legal, photocopying and printing costs. A number of virtual data room vendors have established a market for secure file sharing technology, providing secure servers and document management technology tools to various clients, mostly in finance services, investment, biotech and legal industries, who don’t want to allocate technical resources to host paper-based data rooms.
To ensure secure file sharing, the virtual data rom offers document control solutions that are especially well-suited to the unique needs of virtual data room users, for example:
- Each users or a group of users are assigned with specific data access permissions so they only can access particular documents in the VDR
- Uses access documents securely from a variety of platforms and user environments, so the data room vendor assures that any client software must not pose any inconvenience to other users
- All documents are strongly encrypted to prevent unauthorized access, viewing, saving or printing. Documents are encrypted in real-time as they are being uploaded, or can be set to self-destruct upon a certain period of time.
- Document access permissions can be dynamically enforced or retrieved, with a possibility of termination upon delivery. All document and data room access rights can be modified quickly to include any new VDR users
- Document access is also granular even if the user has successfully authenticated and entered the VDR, and special permissions regulate his/her ability to view full-screen, print or copy the documents.
- To secure file sharing, virtual data room enables detailed access controls such as restricted printing, dynamic watermarking, and expiration of privileges.
- Secure file sharing encryption does not interfere with document review rights and digital signature tools. Dynamic encryption is applied to any data volume.
- Watermarking is especially useful since they can assist in tracking and versioning control of printed documents. Watermarks can contain data room name, user data, time and date the document has been accessed. These credentials can be enforced on all segments of data even after the user has downloaded them.
- Document can be expired after a period of days, hours or even seconds, and page-level control over viewing and printing ensures additional secure data sharing control.
- Access control polity not only increases the secure file sharing of VDR documents but also enables version control, ensuring that users are always access the latest version of the document.
- Authorized end-users can access the secure documents seamlessly (without passwords) as long as they are logged into the VDR’s server or using an authorized machine. When offline permission is enabled, users may access the document when being offline, for example, during travel.
- The data room platform ensures that changes to the data are made immediately, even in multiple languages. For the most deal participants, flexibility is essential. Sometimes data requirements and document needs can change on a whim of a second. The ideal virtual data room should be designed to facilitate instant updates by any authorized user. Best virtual data room solutions providers use client-facing interfaces with the ability to empower users in effective ways to manage the loads of data that a transaction requires.
- Audit tools are among the most crucial features of any virtual data room, and should be used extensively. The data room administrator should be able to monitor user activity to collect data regarding parties’ interest. At the completion of the deal, detailed auditing tools can provide unbeatable proof of disclosure. User activity reports should be analyzed and delivered to all parties at the end of the project on physical media such as flash drives providing an archive-quality audit trail.
When global financial institutions, private equity, and corporate development corporates need the right combination of secure file sharing technology and stringent security for their deal, they turn to the best virtual data room providers that set the industry standards for best compliance and security practices. The good virtual data room provider should also be adept in financial communications, having what it takes to get the deal done, and ensures the necessary security measures are taken to meet the needs of modern dealmakers.