Virtual data rooms are locations where companies can store and distribute confidential documents to selected third parties. This helps reduce the risk of sensitive business information being disclosed to unauthorized individuals. Traditionally, due diligence was conducted in physical rooms, but nowadays, it’s done online in what are called virtual data rooms (VDRs).
The best VDRs offer security-first features that reduce the cost of data breaches and unauthorised sharing. These include granular control over check that access to documents, multi-factor authentication, session timeouts, location restrictions, secure spreadsheet viewers, watermarking, screenshot blocking, and encryption. All of these functions work to create a robust digital fortress that safeguards the data stored in the VDR and is shared with customers.
When selecting a secure data space, it is essential to make sure that the service is actually fit for purpose and doesn’t allow authorized users to login and share their files on other platforms. Some “secure” systems claim to stop this, but the truth is that they aren’t – they simply secure your files on the server prior to delivering them to your browser.
They depend on your browser to have a certificate and being configured to only accept certificates from reliable sources. This doesn’t mean your VDR is safe from hacking, however, it ensures that hackers are only able to gain access to encrypted files, not your unencrypted temporary files.