Why you should use VDR for secure document management

Nowadays we are all accustomed to cloud computing and virtual storage as it is used on most mobile devices and even laptops. Instead of storing data in a physical location we now store it on the cloud – a form of virtual storage that allows data to be accessed by logging into your account on any device with an internet connection. The boom of cloud storage has made life much easier for all of us as it frees up masses of expensive physical storage and allows for the easy and secure sharing of documents and photos.
A virtual data room essentially takes this concept a notch further by prioritising the security and safety of the documents being stored so that large businesses and companies can use them for data sharing purposes. One of their many benefits is their ease of use over conventional business file sharing methods such as emails or even physical data rooms, but their main selling point is their absolute focus on privacy and security of documents.

Why VDRs?

In the past, many large deals worked on by accountants, attorneys and other businessmen and businesswomen would have been facilitated through the use of a physical data room in which sensitive company information would be shared with both parties to the transaction. The physical rooms allowed for privacy of those parties in the transaction but also played a key role in preventing the information from being seen by parties outside of the room – or unauthorised persons.
As the world moved away from physical and into digital, businesses were reluctant to relinquish their secure data rooms as emails and the like did not provide the sort of security needed on high-stakes transactions. At the same time, all other modern forms of file sharing that are secure do not offer the ability to monitor and prevent unwanted distribution of documents – they can’t prevent leaks. Essentially, if you email someone a sensitive file, there’s no way of stopping them from forwarding that file to anyone they want, or knowing that they have done so.
Virtual data rooms solve these problems by providing an intuitive platform through which documents can be shared, discussed and collaborated on in a controlled and highly secure environment.

Virtual data rooms offer the best file security

All virtual data rooms are centred around their ability to facilitate secure file sharing. They offer military grade security and the ability to specifically control who has access to each document as well as exactly how much access they have. These features have made VDRs widespread in the business world to the extent that you will struggle to find a large corporate that does not utilise one.
They achieve this high level of file security and user privacy through a combination of features that allow files to be protected at all stages of the process – from uploading to storage, downloading and viewing.
Many virtual data room providers will use their own data centres, located at various sites around the world to minimise the risk of downtime and data loss. Utilising and securing their own data centres allows them to better protect the data being stored on their platform and helps them ensure that your data is protected from both digital and physical risks.
The process of document transfer is also highly securitised through the use of VPN tunnels in uploading and, in most cases, by prohibiting the downloading of sensitive files. This helps ensure that they cannot be shared beyond the intended party and also prevents the files from being stored on multiple devices – a security risk for hackers. By only allowing viewing access to files, virtual data rooms keep the actual file safely secured on their servers so that it is always under your observation and control.
Now that the actual file is secured and protected, virtual data rooms go even further by allowing the owner of the documents to create different access permissions for different parties. These range from being able to read and edit full documents to only being allowed to see specific portions of specific documents. This means that you only have to share what is needed at different stages of the transaction. You can grant more or less access permissions as the transaction unfolds depending on how negotiations are going.
By putting you or your company in complete control, you can monitor and asses how the deal is progressing, who has been contributing and who has seen and not seen specific documents. Most providers also facilitate private and secure negotiation through using chat rooms on the virtual data room platform to speed up the data-intense and time-intense parts of the transaction.

Saved time and reduced operational costs

The convenience of VDRs allow deals to be worked on and closed by multiple parties across the globe, all while in a safe and secure environment. Performance of employees on deals can be monitored and tracked and most companies have reported all round improvements in productivity due to the use of virtual data rooms.
This allows them to expedite the due diligence process of M&As, cutting down significantly on operational costs as well as precious time. This allows businesses to meet strict deadlines as well as cost cutting targets, while simultaneously increasing the volume of deals they can take on.
The use of VDRs also creates the image of accountability. No more deals done in shady private rooms with some parties being present and others not. VDRs allow for a multi-party approach to deal making that involves many stakeholders at different levels. This makes your business much more attractive to investors as transparency and accountability are valued highly.


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