Friday, January 12, 2024

The Ultimate Guide to Securing Your Data Room


A virtual data room is a cloud-based solution that enables businesses to share sensitive documents securely, particularly in complex business transactions like Mergers and Acquisitions (M&As), fundraisers, and IPOs (Initial Public Offerings).

By default, your virtual data room should be more secure than any other file-sharing and storage solution you might have used before. But to secure your data room, you must learn about its features and how they can help you improve security in different situations.

In this guide, we’ll walk you through what you need to do to secure your virtual data room.

What makes a data room secure?

The primary difference between data rooms and other cloud storage services is the level of security and control you get with each of them.

Virtual data rooms incorporate advanced security and control features that enable secure file sharing and collaboration in sensitive business transactions. They’re more efficient and much less risky to use.

On the other hand, consumer-level file-sharing services have basic security features that don’t provide much control over access permissions or audit trails, and you can’t set watermarks or document expiration dates.

How to secure your data room

Data room services use strong encryption methods that keep your data protected when stored on the cloud. This includes data protection when the document is in transit, as well as encryption for the document itself.

You don’t need to do anything to encrypt your document as this is applied by default. However, to make the most out of your data room and maintain maximum security, you need to familiarize yourself with its features:

Document permission control

With a secure data room, you can control access permissions for each document and individual on a granular level. For example, if an employee wants to print a document, they must request permission from the data room’s admin. This ensures that only authorized users can access or modify sensitive documents. 

Digital watermarking

Many electronic data room solutions enable you to add watermarks to your documents to maintain document ownership rights and confidentiality. They use embedded markers on the documents to secure ownership. 

Some data rooms use visible watermarks, while others keep them hidden. 

Dynamic watermarking lets you keep track of what other people in the data room are doing with the documents, ensuring that no information is compromised.

Two-factor authentication

Two-factor authentication requires you to go through multiple steps to log in to the data room. For example, instead of only inputting your username and password to log in, you might also be required to submit an OTP that was sent to you on your phone to verify your identity. 

Audit trails 

The best data rooms provide full details on each user’s IP address, device, and location. This provides you with better control and tracking to maintain confidentiality and security. 

Audit logs also provide useful insights into your data room, covering all the activities on it. This includes both user and document activity.

Single Sign On (SSO)

SSO enables users to access various apps using the same username and password. Most virtual data rooms support SSO, which makes it easier for users to log in to the data room and the integrations in the same workspaces.

All-round support

The best virtual data room providers offer 24/7 technical and customer support. So whenever you think there’s an issue with your data room, you can contact support and get assistance quickly. This is essential because some problems can’t be waited on, such as security issues. 

Customizable terms of access and NDAs

With data rooms, you can create customizable Non-Disclosure Agreements (NDAs) that users can sign. This helps you preserve your rights and make legal claims and lawsuits on solid grounds in case a user misuses the data room. 

Remote shredding

Did you know that data rooms let you destroy documents, even if a user has already downloaded them? This is a feature called remote shredding. If you suspect that an unauthorized user has downloaded a document, you can revoke their access with remote shredding. 

Final words

That was a quick overview of how to secure your online data room software effectively. Implementing two-factor authentication and using watermarking are great first steps to securing your data room. 
You should also utilize the built-in access permissions to control who can view or modify different documents. Just make sure that you check a data room review or data room comparison when choosing a solution for your business.

John Myles
John Myles
John is a renowned expert writer in the field of technology, with an exceptional track record that speaks for itself. Having worked for multinational companies, he has consistently demonstrated his expertise and dedication, earning a reputation for excellence in his field. Currently, John showcases his profound knowledge and passion for technology through his writing at ItsReadTime.


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