The security of confidential information in financial transactions is of paramount importance. Virtual data rooms allow users to keep and share private documents in a controlled setting. They are typically used for due diligence in M&A deals, but they can be used for other purposes as well.
The best VDRs have a variety of features that ensure documents are stored in a secure manner and used throughout a transaction or a process. They can, for example, include two-factor verification, which requires not only the password is utilized, but also actual data and codes that are unique to each user. This decreases the chance of data breaches caused by compromised passwords. Many VDRs also provide granular access rights that restrict access to certain files. Another feature is IP restriction, which restricts access to the virtual data rooms to specific IP addresses. This stops sensitive data from being downloaded onto unauthorized devices, and also helps avoid leaks.
Other features that are offered on some VDRs include watermarking, which displays an unchangeable identifier on every document, as well as audit logs, which record the actions of files within the data room. They are used to determine who has accessed or modified files, and can also aid in the investigation of data security breaches. Other beneficial features include secure spreadsheet viewing, which assures that the contents of Excel files can only be viewed and viewed by designated users.
When selecting a data room, be sure to check its certifications and standards to ensure that it offers the right level of security for your documents. The ideal situation is PCI DSS Level 1 ISO 9001 or ISO 27001 FIPS 140-2 MTCS Level 3 Some investment banks maintain a list of approved vendors that offer data rooms with which they are happy working. It is important to choose an organization that has these credentials and has a solid reputation in the business.