Businesses lose millions of dollars every year due to data breaches and cybercrimes. Research says the average cost of a data breach in 2024 was $4.88 million .
Businesses lose millions of dollars every year due to data breaches and cybercrimes. Research says the average cost of a data breach in 2024 was $4.88 million. It is hard to believe that cybercrimes are increasing despite advancements in protective measures.
What most businesses fail to realize is that cyber criminals have also come a long way. Traditional cybersecurity methods are not effective anymore. Businesses need to move to secure data-sharing platforms like virtual data rooms to gain more control over data.
The need for data room solutions intensifies when you have to share highly sensitive information during M&A deals. These transactions require sellers to allow buyers to access their corporate information in the due diligence phase. But again, not all virtual data room solutions are equally safe for such transactions.
The real question is, how do you know if your data sharing platform is safe for M&A deals? This article lists six important security features you must have in your dataroom software or any other platform.
Virtual data room software (also known as a deal room) is a secure digital document storage and management platform. Dealmakers and different types of businesses use data rooms to safely share and manage sensitive data in M&As and other similar transactions.
Data rooms provide a secure and remotely accessible place where multiple parties can collaborate in all possible ways. They can
· Upload, access, and share documents
· Add notes and comments on files and folders
· Engage in group discussions and online meetings
· Track deal performance
· Communicate via Q&A modules and instant messaging
· Sign agreements and contracts online
The important thing is to choose from secure vendors that can ensure maximum data protection during M&As. You can also explore some of the best data room providers at https://data-room.ca/
Let's move to the essential security features to have in data-sharing platforms.
Data protection starts by controlling users’ access to the data room. It is important to make sure that the impersonators do not get into your VDR. Here are some important features to look for.
MFA is a commonly used feature in any reliable data-sharing platform. It gives an additional layer of protection by adding an identity verification step. The users have to provide a one-time generated code during the login process.
Data room administration can manage user permissions according to their roles and responsibilities. Management can define access for who can or cannot edit, share, delete, download, or copy documents.
Admins in the data room can also restrict user access to pre-defined periods. Users will only be able to access the data room during that time window. The administration can also define a range of IP addresses and block others. This prevents intruders from accessing a VDR even if they get the right credentials.
Businesses prefer virtual data rooms because they come with multiple layers of protection. Modern-day data room providers offer advanced document security features. These features keep internal users in check. Here are some of the document protection features to look for.
Data encryption is a mandatory feature if you intend to share data with external parties. Go for advanced encryption like 256-bit SSL, as it encrypts the data during transit and at rest.
Digital watermarks are usually images or texts that appear on the document when you download, view, or print them. They provide a layer of protection and are handy to prevent copyright attacks. You can add an image, signatures, or your name as a watermark.
It is one of the most important and advanced features necessary for external data sharing. Redaction allows you to remove fragments of text when sharing data. You can hide confidential content in the file and only allow access to the portion you want to.
Fence view is a remarkable security feature that prevents users from taking screenshots or pictures of a document. Users need to hover the cursor over the document to see the content while the remaining portion remains blurred.
Deals like M&As include collaboration between multiple parties. It may include investors, company directors, consultants, and other stakeholders. The data-sharing platform you choose must allow you to track users' activities.
Modern-day data room solutions come with a built-in audit log feature. It helps you keep track of everything taking place in your VDR. You can track and monitor every user's
· Login time and other details
· Documents accessed or shared
· Comments or notes added to the document
· The time they spend in the data room
Such features also promote a sense of accountability and keep things transparent.
Compliance is another key factor to consider when using a platform for external data sharing. Look for solutions that are ISO 27001 and SOC2 certified. It is also important to comply with regulatory authorities in the region where you are operating. For example, businesses operating in Europe must go for GDPR-compliant data storage platforms.
Last but not least, always go for a vendor that pays attention to infrastructural security. That said, your service provider must have 99% uptime to make sure you can access your data whenever you want. Multiple data centres at different locations and data backups ensure data protection in case of natural disasters.
Apart from the security features, read virtual data room reviews to evaluate what customers think about the vendor you choose to hire.
