A virtual data room (VDR) is a digital repository that facilitates collaboration and the sharing of sensitive information in secured, encrypted environments. Companies use VDRs to protect private data from cyberattacks and unauthorised downloading and viewing particularly during crucial business transactions such as M&A deals.
The advantages of having a secure VDR for companies that want to safeguard their intellectual property and confidential information far outweigh the risks that are associated with traditional file-sharing methods like email or cloud storage. Data leaks can cost businesses time, money, and reputation — and the best way to avoid such catastrophe is to implement a robust set of security measures.
VDR security features include multi-factor authentication for identifying users as well as granular permissions for controlling access to documents and digital files and audit logs to track the activities of files. Regular backups of data will ensure that data stored in VDRs can be recovered if the system fails, or is the victim of a cyber-attack.
If a company is searching for a VDR and is looking for one, they should opt for one that utilizes an industry-leading encryption system to encrypt sensitive information during transmission. It also offers a security measure in the event that an unauthorized user gains unauthorized access to a document or file. Advanced security measures, such as MFA or login monitoring to verify the IP address, location of the device as well as the location of the user, can be used in order to prevent data breaches and other security violations.
Companies that are regulated by regulatory agencies such as the FCA must be sure that their VDR provider’s policies for handling data align with these regulations. This assures that any issues or complaints are dealt with promptly and efficiently, thereby reducing the risk of legal issues and harm to the reputation of a company.