Virtual Data Rooms have become synonymous with corporate takeovers, mergers and acquisitions, due diligence and loan syndications. Replacing the traditional data room of the past, Virtual Data Rooms allow the process of securing and sharing files to take place in an online environment, providing businesses with saved costs and time. As digital has become the new normal around the world, so too have Virtual Data Rooms become the go to solution for large scale corporate transactions.
The last ten years have seen the market for Virtual Data Rooms flooded by big and small providers all trying to get a piece of the lucrative corporate VDR pie. While these platforms will differ in their user experience, customisability and design, they are all equipped to feature the backbone of any good data room – security.
If the dawn of the digital age had taught us anything, it is that while computers and the internet have made life easier for all of us, it has also made the job of hacking and breaching data easier to the point where anyone with an internet connection is a potential threat to the security and safety of online data. This is why Virtual Data Rooms advertise security as their main and most important feature. It is their ability to securely transmit files between pre-distinguished individuals that make them so popular for large corporate deals.
How secure file sharing works?
Virtual Data Rooms work by letting you grant other users as much and as little access to documents and files you share on the platform. The files shared during large transactions often contain company sensitive information so Virtual Data Rooms ensure that the actual file is never downloaded by the person it is being shared with unless specific permission is given by the owner of the data. This allows predetermined people to view and discuss sensitive documents, all within the controlled environment of the Virtual Data Rooms but never compromises the security of the company by letting those documents be printed or saved or otherwise distributed.
Access can be given to specific people and different levels of access can be given to different people. These range from full access which included the ability to download the original document as one would from an email, to fence view access which only allows a user to see a portion of a document and prohibits downloaded, screenshotting or sharing the document whatsoever.
File restrictions can also be placed depending on the time zone, GPS location and IP address of the user to ensure that only the exact person or people you want to view the documents will end up viewing them. Throughout the whole process, you will also be able to monitor and read reports on who has viewed and who has not viewed specific document as well as facilitate secure discussion through chat rooms on the platform.
How are documents kept secure and safe?
As we all know from the numerous breaches of data that occur every year, sharing files securely does not always mean they are safe from being targeted. The risk of data breaches becomes even higher when attackers know that highly valuable corporate information is being shared, which is precisely why Virtual Data Rooms are used over emails or even encrypted servers.
The best Virtual Data Rooms will have both physical and digital protection available for customer’s data. This can include using multiple data centres around the world that are physically secured and that will prevent an attack on any one data centre causing data to be lost. This also ensures the platform will have good uptime and will be nearly impossible to take down through a virus. All data will be securely backed up in real time and Virtual Data Rooms providers will also guarantee disaster protection by ensuring the data centres are protected from flooding and fires.
The data stored on the platform is encrypted to the highest of international standards and is stored in different ways to the troves of public data most companies and websites accumulate. This ensures that documents are safe, both while being stored and while being transferred through upload or download.
Why choose a Virtual Data Room?
With the level of digital security being so high, the biggest threat to data stored on Virtual Data Rooms tends to be legitimate users who have been granted access to data attempting to share it with other unauthorised persons. Most data rooms protect against this by watermarking all documents with the name, date and IP address of the authorised user so that, in the case of a leak, the origin can be quickly found and the correct legal action can be taken. Platforms also allow for documents to be viewed for short periods of time before self-shredding to prevent undesired sharing. At all points of the deal or transaction, you can monitor, control and change the access permissions to various documents so that you can stagger the release of information as the deal progresses.
Virtual Data Rooms offer unmatched security while simultaneously allowing collaboration and cooperation so that deals can be closed in the most efficient manner possible. The time and money saved is an added bonus to the security of your companies most sensitive information and is why Virtual Data Rooms are used on almost every large transaction today.
The ability to close deals and complete due diligence between parties all over the globe make Virtual Data Rooms the go-to resource for corporate interaction. Most will even offer the ability to tailor the platform so that it includes company branding and integrates seamlessly into existing web portals and databases. With hundreds of VDRs on the market all offering secure file sharing, the hardest decision becomes which data room provider to use and not whether to use a virtual data room. Companies’ testimonies on Virtual Data Rooms are evident of how much trust they place in them as well as how much they rely on them, with VDRs forming an integral part of day-to-day functioning of many large corporates.