The security of confidential information is essential in business processes and transactions. Virtual data rooms are used to share and archive private documents in a secure environment with controlled access for users. They are usually used to perform due diligence in M&A transactions, but they can also be used for different purposes.
The best VDRs provide a variety of features that ensure documents are stored securely and shared during a transaction or process. They could, for instance include two-factor verification which requires not only the password is used, but also real information and codes that are unique to each individual user. This reduces the risk of data breaches caused by compromised passwords. Many VDRs also offer granular permissions that restrict access to certain files. IP restriction is another feature that limits access to virtual data rooms to certain IP addresses. This helps protect sensitive information from being downloaded to unauthorized devices and also prevents leaks.
Some VDRs also feature watermarking, which is an irremovable identifiable identifier that is placed on every document. They also have audit logs which keep track of all actions made on files within the data room. They can be used to find out who has opened or modified files and can also aid in the investigation of data breaches. Other beneficial features include secure spreadsheet viewing, which ensures that data in Excel files can only be viewed by specific users.
Examine the certifications and standards of the data storage facility to ensure that it has the proper security level for your documents. The ideal situation is PCI DSS Level 1 ISO 9001 / ISO 27001 FIPS 140-2 MTCS Level 3. Some investment banks have an approved list of vendors that include data rooms with whom they are pleased working. You should look for a provider of data rooms that has these credentials and has a solid data room software safety reputation in the industry.