A secure virtual data room (also known as a VDR electronic data room, or an online due diligence platform) allows companies to securely share critical documents with third parties over the internet in a secure environment. During transactions such as M&As and fundraising, real estate deals as well as IPOs the documents shared contain confidential information. This means that they must be secured from cybersecurity threats.
A VDR offers a variety of security and control features, compared to service providers that offer basic upload, storage, and downloading capabilities, which can present security risks. Examples include granular access rights Data Room Setup for documents, restrictions on viewing, printing and downloading, dynamic watermarking and two-factor authentication. Additionally, a virtual data room is continuously backed up and inspected for integrity to ensure files can’t be accidentally deleted.
VDR providers provide powerful collaboration tools that can help companies complete complex transactions such as M&A due-diligence and increase their effectiveness. A virtual data room, for instance provides a Q&A space that allows both external and internal stakeholders can communicate. This feature helps save time by removing the need plan meetings, and it can also make it easier to track changes to documents.
The most reliable VDRs also have robust physical security measures, including backups offsite and fire protection as well as biometric access. They have a business continuity plan and conduct regular penetration testing to avoid data loss. Moreover, they employ multiple layers of security against ransomware as well as other types of cyber attacks. They also have disaster recovery systems which include data center recovery tests and a recurrent failover capability. FirmRoom, for example, backups customer data and servers every day, ensuring files are never lost.