A virtual dataroom (VDR) can be described as a digital archive that allows collaboration by sharing sensitive data and making it secure by encrypting it in a safe environment. Businesses use VDRs to safeguard confidential data from cyberattacks, downloading and viewing without authorization, especially during important business transactions such as M&A deals.
The benefits of the security of a VDR for companies looking to safeguard their intellectual property and confidential information far outweighs the risks associated with traditional file-sharing options like email or cloud storage. Data leaks can cost companies time money, reputation, and even money — and the best way to prevent such a catastrophe is to implement a robust security program.
VDR security features include multi-factor authentication for identifying users and granular permissions to manage access to documents and digital files, and audit logs that record the file’s activity. Regular backups of data also ensure that the data stored in the VDR can be retrieved even when the system fails or is subject to a cyber attack.
Companies looking for VDRs should consider that VDR should select one that offers industry-leading encryption technology to make sensitive data unreadable during transmission and provide a safety net in the event that an unauthorised user gains access to the document/file. Advanced security measures, like 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 types of security violations.
Companies regulated by regulatory bodies such as the FCA should also be sure that the policies regarding data handling of their VDR provider are in line with the regulations. This will ensure that any issues or complaints are addressed quickly and effectively which reduces the chance of legal problems and damage to a company’s reputation.
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