A virtual data room (VDR) is an electronic repository that allows collaboration and the sharing of sensitive data in secured, encrypted environments. VDRs are used by companies to safeguard sensitive information from cyberattacks and unauthorized access or downloading, in particular during major business transactions such as M&A deals.
For companies that want to safeguard their intellectual property as well as confidential data, the advantages of using an encrypted VDR outweigh the risks that are associated with traditional file-sharing techniques such as email or cloud storage. Data leaks can cost businesses time, money, and reputation and the best way to prevent this from happening is to implement a robust security system.
Common features of VDR security include multi-factor authentication to confirm user identities, granular settings for permissions for controlling access to documents and digital files and audit logs to monitor the activities of files. Regular data backups ensure that the data stored in VDRs can be recovered if the system fails, or is the victim of cyber-attacks.
If a company is searching for a VDR and is looking for one, they should opt for one that uses an industry-leading encryption system to encrypt sensitive information during transmission and provides a failsafe if an unauthorized user gains unauthorized access to a document or file. Advanced security measures like MFA and login monitoring to verify the IP address device, the location of the user can be employed to prevent data breaches and other forms of security breaches.
Companies that are regulated by regulatory bodies such as the FCA must ensure that their VDR provider’s policies regarding data handling are in line with the regulations. This will ensure that any complaints or issues are handled quickly and fairly, reducing the risk for legal pitfalls and damage to a company’s reputation.