Data breaches surged drastically in the third quarter of 2022, affecting 108.09 million accounts. It is 70% higher than the data breaches in Q2, 2022. What’s more astonishing is that all of this is happening even after unprecedented efforts in the cybersecurity industry. So, where does the problem lie?
One of the major mistakes businesses, especially smaller ones, make is using free or cheaper data protection tools. The digital world is evolving, and so are cybercriminals. Businesses need to understand the importance of better and more secure data protection tools like virtual data rooms.
Although virtual data room solutions are not new to the world, their application was mostly limited to bigger financial transactions. Modern-day virtual data room solutions also target SMBs, service providers, firms, professionals, corporate boards, and even government agencies. But how are they better or more secure than traditional data management platforms? Let’s find out!
What is online data room software?
Online or electronic data room software is a blend of multiple technologies used for three important functions:
- Data storage, sharing, and management
- Virtual communication
- Project management
Dataroom software is a cloud technology where you can create, upload, share, edit, distribute, and save your corporate or private information. You can distribute data without leaving the platform, as data rooms allow you to add as many users as you want.
The communication tools in the virtual data rooms ensure safe, real-time communication. The corporate world uses data rooms for board meetings, team meetings, online voting, meeting management, Q&A sessions, etc.
Electronic data room software is a regular part of modern-day dealmaking. Its data analysis features simplify investment decisions, strategic partnerships, and private equity ventures. Click here to read how private equity deals get simplified and facilitated through data rooms.
Why are virtual data rooms more secure?
Data rooms are considered much more secure compared to free data storage solutions — and that’s for a good reason. Compared to free tools, data rooms offer more platform security, are run by certified hosts, provide more document control, and track every interaction within them.
Here’s what specifically they offer, in more detail.
1. Data rooms have better platform security
Digital data rooms are differentiable because of their security strength which is unparalleled. Data rooms apply multiple layers of security starting from the platform.
The two-factor authorization or multi-step verification acts as the first barrier to data room entry. Only the right credentials and information can help users get through. Multi-step verification is even more rigid as it requires users to complete multiple identity verification processes.
Highly quality data room services create backup copies of your data on multi-location servers. That means there are minimal to no chances of accidental data loss.
The data room administrator can immediately remove any user from the platform and delete all files downloaded or browsed by them. Administrators can even restrict or schedule user logins to a specific time window.
2. Data rooms are run by certified hosts
Standard virtual data rooms are not simple storage platforms; certified vendors host them. In fact, it should be an important part of your data room selection process. Many vendors prefer international certifications like ISO 27001, 27018, 27017, GDPR, etc.
Moreover, these providers also have to comply with local regulatory bodies. A virtual data room vendor serving the financial industry in the USA should be FINRA compliant. Similarly, VDR providers for healthcare need to be HIPAA compliant. Other notable certifications include FISMA, SOC1, and SOC Type II.
3. Data rooms give more document control
Online data room software can give you more control over your data than many other similar tools. You can limit any user’s access to any level you want. The data room administrator can restrict any user or group of users from downloading or editing documents. These restrictions can extend to file sharing, printing, saving, or copying.
Tools like fence view mode even restrict anyone from capturing photos or taking screenshots of the documents. File owners or administration can add digital watermarks to confidential data. Watermarks track all the activities and changes incorporated in the documents. It is not possible to remove watermarks from the file, so copyright claims are easy to settle.
The VDR management or file creators can also revoke access to documents at any time. Many VDRs have a document shredding feature that automatically removes files from users’ browsing history.
4. Data rooms keep track of everything
One of the most valuable features in VDR, audit logs or audit trails, make sure you have a record of everything happening in your virtual data room.
It gives every minor detail, including who accessed what, when, where, and for how long. You can track how much time a user spends in the VDR and every change or action performed on the files. It allows you to catch all irregularities red-handed.
Virtual data rooms are different from other data management services due to their superior security features.
The most notable characteristics of data rooms include better document protection, more document control, traceability of each interaction within the data room, and compliance with globally known security standards.
This is what makes virtual data rooms a reliable choice over their physical counterparts or free data storage alternatives.