A virtual dataroom (VDR) can be described as a digital repository that helps collaboration sharing sensitive information, and encrypting it in a secure environment. VDRs are utilized by businesses to protect private data from cyberattacks and unauthorised downloading and viewing especially during major business transactions such as M&A deals.
If you are a business looking to secure their intellectual property as well as proprietary data, the benefits of using an encrypted VDR outweigh the risks of traditional file-sharing methods like email or cloud storage. Data leaks are costly to a company in terms of time, money, and reputation. The best method to avoid an event is to put in place a robust security system.
Typical characteristics of VDR security include multi-factor authentication for confirming user identities, the ability to set permissions in granular ways to restrict access to documents or digital files and audit logs that track file activity. Regular data backups ensure that data stored in VDRs is recovered if the system fails or is the victim of cyber-attacks.
Companies searching for VDRs should consider that VDR should consider one that is equipped with an industry-leading encryption system that can scramble sensitive data during transmission and provide a failsafe in the event that an unauthorized user gains access to the file or document. Advanced security measures, such as MFA or login monitoring that monitors IP address, device location as well as the location of the user, can be used in order to prevent data breaches and other security breaches of various kinds.
Companies regulated by regulatory bodies such as the FCA must also ensure that the policies for handling data of their VDR provider align with the regulations. This will ensure that any issues or complaints are addressed quickly and effectively, reducing the risk for legal pitfalls and damage to a company’s reputation.