A virtual data room, also called a VDR, is a digital library for confidential correspondence and sharing of data. Today, it is being used mainly for financial transactions such as mergers and acquisitions, initial public offerings, fundraising, and the like.
As you might imagine, the security of Virtual Data Rooms is paramount to the success of the deal. In a merger and acquisition, for instance, relevant information that is leaked to the press or the competition can scuttle the agreement.
So, are your data safe when you store them in the VDR?
The Internet has revolutionized the way people do business, especially when it comes to sharing and storing documents. There are thousands of office solutions that enable two parties to send a file quickly and efficiently.
However, it also spawned a problem–cybersecurity.
You may think that hackers only target the big ones. You read on the news how Amazon, Facebook, Microsoft, and Yahoo fell victim to cyberattacks. But it is the small businesses that are the most vulnerable.
For instance, the CNBC report said that small companies lose an average of $200,000 to hacking. That amount is nothing to scoff at. A significant number of these businesses have closed shop, as a result. The attack can both be internal and external. What most people probably do not realize is that their employees are also the most significant threats. Human error or a weak password is the most common cause of cyberattacks.
How Safe are Virtual Data Rooms?
Service providers do not need an extra incentive to make sure the Virtual Data Rooms are secure. News of a breach will send existing and potential customers scurrying away.
So, you can imagine they have all the reasons in the world to safeguard your documents.
All private data centers should be compliant with ISO:27001, and this is the highest certification they can have. The badge serves as your guarantee that they are enforcing maximum security measures for the data room.
The latest security software and firmware also protect the data room. Meanwhile, authorized users need to pass a two-factor authentication process before they can access the data. They also require permission from the administrator before they can enter the virtual space.
Meanwhile, if you access the data, the activity is logged to be reviewed by the administrator. If somebody downloads a document, the name of the employee will appear. Anything that happens to the file will be their accountability. They can then be held responsible if the information in the document is leaked.
Everything that happens inside the virtual data room is recorded. The IT will also be alerted in case of unauthorized access. They can immediately kick out the threat, lock down the server, and implement damage control.
Virtual Data Room vs. Dropbox and Google Drive
It is amazing how some companies entrust critical data to Google Drive or Dropbox. Small businesses can be forgiven for using these free solutions. But you have multi-million companies being negligent with their files and documents.
While those solutions are secure enough for everyday use, these cloud services are not ideal solutions for your mission-critical data. You need a more reliable solution for mergers and acquisitions, initial public offerings, and other high-profile deals.
Article Submitted By Community Writer