Virtual data rooms are one of the most promising and highly adopted SaaS solutions of the 21st century. In fact, it won’t be wrong if we call them the unsung heroes of the corporate sector, especially M&A, finance, and real estate. The virtual data room global market is expected to hit $3.2 billion by 2026.
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So why is an electronic data room becoming so popular in various business sectors? The biggest reason behind the success of virtual data rooms is their robust data security features that protect your business data from all types of threats and mismanagement.
Keep on reading if you want to know more about virtual data rooms and how they protect your business data. But before that, let’s introduce you to the basics of online data room software.
What is data room?
A virtual data room or simply data room software is:
- An online cloud-based data repository where businesses can store, share, and manage their business data in a totally safe environment.
- It is a complete and highly secure virtual working place where employees can collaborate with maximum ease.
- Lastly, a virtual data room is an online platform where businesses can directly deal with customers, clients, and buyers (in the M&A industry).
We have established a basic understanding of virtual data rooms, but how do they protect your business data and save your time and money? Let’s find out!
How do VDRs protect data and save time and money?
Data room provides security at various levels to keep your business data safe; here is how.
1. Protection from unauthorized entry
The first and one of the most important security features of virtual data rooms is their two-step verification system. Two-step verification makes sure that there is no unwanted or unauthorized entry in the data room. That’s because even if the hacker somehow gets the password of a data room user, it still cannot access the data room without completing the second verification step.
In fact, the data room user will be immediately notified through different means if anybody tries to use their credentials to access the data room.
2. Limited access or permission to documents
Virtual data rooms allow the management to set access restrictions for different users at different levels. For example, if the management doesn’t want any user or a group of users to access a file, it can easily restrict them. In fact, the management can even limit specific users to access a section or complete folder in the data room.
Similarly, the “view only” option allows the management to set restrictions on copying, editing, modifying, downloading, or printing a document or a particular section of any document.
Access restrictions are very useful, especially for M&As where sellers can add buyers to the data room and give them restricted access to documents as per their needs.
3. Secure data sharing through encryption methods
Data room users can share data in an encrypted form. Generally, data encryption allows the users to encode data before moving it to the cloud storage. However, the problem is the data may be encrypted, but the document itself is not always encrypted.
Online data room software has also solved this problem because users can now encrypt the document and the data inside. Data encryption makes sure that the file is only decoded by the intended recipient.
4. No copyright issues due to digital watermarking
Digital watermarking is an ideal solution to avoid data leaks and settle copyright claims. It is basically the use of embedded markers on the data that helps identify the ownership of the file.
Digital watermarking helps in keeping track of who is printing or downloading a file, thus helping in controlling information leaks. This watermarking can be visible or invisible.
5. Audit logs and track of user IP
Audit logs help the management to keep an eye on who is doing what, when, and where. Audits logs provide complete information about every user activity in the data room.
Similarly, a virtual data room allows the management to track the IP, location, and device of the users who access the data room. Although it is a basic or standard feature, it greatly helps in reducing data leaks or misuse of the data room.
- It is important to note that you may not find these features in every data room. Therefore, we recommend you to go for certified virtual data room services that comply with international security standards such as ISO 9001/ ISO 27001, SOC2, FINRA, etc.
6. Better data management
Virtual data rooms make data management a whole lot easier. A business can simply store all its data at one location and then allow its employees to access it from anywhere in the world.
Virtual data rooms save you from spending hours finding a document from tons of files. All you have to do is just search the file with its name or keyword, and it will be accessible in a matter of seconds.
Moreover, virtual data rooms are a perfect place for remote teams to collaborate in a highly secure environment. They can communicate, create, edit, and share files quickly and conduct virtual meetings too.
Most importantly, virtual data rooms are a very cost-effective option. For example, they help you save paper cost, cost of physical storage space, stationery cost, printing cost, etc.
Moreover, virtual data room providers offer various pricing plans to suit your business needs.
Protecting business data should be the top priority of any business. Going for cheaper options may save you a few bucks, but a data leak can cost you hundreds of customers and thousands or millions in terms of money. Solution? A highly secure virtual data room from a certified data room provider.