Secure storage of confidential data is crucial during business processes and transactions. Virtual data rooms allow users to keep and share private documents in a controlled setting. Generally, they are used for due diligence during M&A deals however, they can also be used for other purposes too.
The most effective VDRs have a variety of features that ensure documents are stored in a secure manner and shared throughout a deal a process. They could, for how does a digital data storage work instance include two-factor verification, which requires that not only the password is used, but also factual information and codes that are unique to each user. This minimizes the risk of data breaches caused by compromised passwords. Many VDRs also have granular permissions which can limit access to specific files. Another option is IP restriction, which restricts access to the virtual data room only to a specific IP addresses. This prevents sensitive information from being downloaded to unauthorised devices and also prevents leaks.
Some VDRs also feature watermarking, that is an immovable identifier that appears on each document. They also have audit logs which track all the actions taken on files within the data room. These are useful to identify who has accessed and modified which files, and may aid in the investigation of data security breaches. Other helpful features include secure spreadsheet viewing, which guarantees that content in Excel files can only be viewed by specific users.
Verify the certifications and requirements of the data storage facility to ensure that it provides the right level security for your documents. Idealy, it should be PCI DSS Level 1 ISO 9001 or ISO 27001 FIPS 140-2 MTCS Level 3. Some investment banks have a list of approved vendors which lists data rooms they are happy to work with. Choose a vendor who has these credentials, and has a good reputation within the industry.