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Guardians of Your Data: How Virtual Data Rooms Keep Your Information Safe



Virtual Data Rooms

As reliance on digital communication and data transmission gets higher in the business landscape, the need for better information security setup gets clearer.

This demand from commercial bodies created massive awareness about brands’ need to protect sensitive information. 

The virtual data room (VDR) came on board in that regard as an important tool for protecting data, allowing safe storage and controlled access to sensitive materials.

What are Virtual Data Rooms?

Virtual data rooms are online storage portals on which businesses can store, manage, and share their sensitive business data with relevant individuals.

The information security technology popularized by the data room solution was developed to smoothen due diligence exercises during mergers and acquisitions. 

This was further confirmed by an industry leader, Gilbert Waters, Co-founder and Marketing Specialist, who said: “VDRs have become the chief solution for secure document sharing in M&A and for complex transactions in other industries”.

The VDRs have come to be used in several industries including legal, pharmaceutical, and financial industries, among others.

The digital data room provides a controlled environment, safe enough to share documents with confidence that only authorized individuals will have access to it.

Key VDR Features To Ensure Data Security

With a special focus on security in this article, we will be shedding light on the features of the data room which made it a solid option for data security in the business world.

  • Access control: One of the chief features of data rooms is personalized access control, which means that the administrator can assign different individuals diverse levels of access depending on the actions they are expected to take and the role they play in a particular task. This feature ensures that each user consumes the data allocated to him by the administrator.
  • Encryption: This is another feature of VDRs that caters to information security and prevents random access by unauthorized individuals. There are different types of encryption, as it concerns VDR data security. They include:
    • Data in transit encryption: In this case, online security protocols try to work against data getting intercepted during transmission. Data in transit encryption sets in data is being passed from a user to a data room server. 
    • Data at rest encryption: This protocol protects pieces of data that are not in use at any point in time or data at rest. It is usually done using unique encryption keys which are stored in separate systems to avoid unnecessary access to them.
    • End-to-end encryption: Some Virtual data room providers arm their software with this encryption pattern. In the case of VDRs, End-to-end encryption means that the information to be passed is already encrypted at the sender’s device before being uploaded on the VDR. The shiny side of this protocol is that users are the only ones who can access the data locked with this pattern.  WhatsApp users may be familiar with this term, as it sits at the top of every fresh chat with a WhatsApp contact. 
  • Document watermarking: Data rooms usually use watermarks to overlay sensitive documents. This process involves using visible or invisible markers on it. Watermarking makes it easy to point out the source of a leaked document if at any point it falls into the hands of unauthorized individuals.
  • Document tracking: This security feature of VDRs allows administrators to know who accessed documents, with advanced details such as when they disc for how long and in some cases, which pages they accessed.
  • Audit trails: This feature means that every action taken on VDRs is recorded for possible future reference. Actions to be recorded include the following activities: document uploads, downloads, edits, and access, among others. Audit trails come in handy when a security breach occurs as it provides insight into what happened and a comprehensive detail of what happened.

These security features make up some of the roadblocks encountered by unauthorized bodies when they intentionally or unintentionally try to make contact with confidential information on a VDR.

How Virtual Data Rooms Ensure Confidentiality

The integrity of data on VDRs is maintained by the following measures:

  • Non-disclosure agreements (NDAs): Before having access to a VDR, users are required to sign non-disclosure agreements or confidentiality agreements. This bond ensures that they understand the sensitive nature of the document they are about to access and binds them legally to maintain confidentiality.
  • Time-limited access: The best virtual data room allows administrators to set expiry data for documents and be able to revoke access to a document at any time. This setup ensures that each user on the platform doesn’t have continued access for a very long time, or indefinitely at least. Adding expiry dates can also be utilized as a way to enforce productivity on teammates as they’d be made to meet project deadlines or the document containing the needed information “self-destructs”.
  • Secure collaboration: Collaboration is important in every aspect of business, then imagine how important it will be if features promoting collaboration are missing in a virtual data room for mergers and acquisitions. Features like version control, annotation, and Q&A modules allow users to converse and work better in a secure environment.
  • Restricted printing and downloading: Irrespective of virtual data room pricing, every VDR provides this option of disabling printing and downloading of documents. This feature allows administrators to prevent users from making copies of sensitive data, which can be taken away from a secure environment.

These are options that a VDR affords its users as long as the focus is on information security.

A virtual data room plays a very important role in making sure that data security is maintained in the modern business environment.

This is evident in the security features installed in the software including access controls, encryption patterns, and auditing systems.  

As cyber-attacks continue to thrive as businesses try to gain access to competitor’s data, the dataroom is out to ensure the integrity of data belonging to each business organization stays behind its wall within their access.

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