What Is a Secure Data Room?
Secure virtual data rooms are now the norm for sharing business documents. They permit companies to share sensitive documents to external parties without the risk of being hacked or losing valuable information. A secure VDR can be a valuable tool, especially in the M&A context where multiple parties have to look over important documents.
In reality, it’s now a non-negotiable requirement in many instances to implement a secure, reliable VDR solution to reduce the risks of expensive data breaches and unauthorized access. The stakes are high, as data breaches can have serious financial and reputational consequences for both the businesses involved.
A secure data room is an online repository for documents that multiple users require to access simultaneously. The platform is secure and provides centralized document storage and distribution that is utilized during due diligence in M&A transactions and for various other commercial reasons.
One of the most frequently asked questions about secure virtual datarooms is whether they can stop authorized users from sharing their documents with other individuals. Some vendors claim that their systems accomplish this by making it easier to login with 2FA or by putting watermarks to downloaded PDF files. These methods are not safe and can be easily defeated.
The life sciences and healthcare industry, for example has led to an increase in the amount of confidential documentation. This includes clinical discoveries and patient information. Accessing such sensitive information to a multitude of untrusted parties could result in competition espionage and regulatory issues as well as costly legal actions. Secure data rooms help stop this from happening by providing features like remote control of data secure messages, and an Q&A feature.