When you’re operating any form of data room, the security falls on your shoulders. That’s why, during any merger, acquisition, or fundraising sprint, you must do your due diligence to secure your data room and ensure that it’s a leak-proof environment that’s capable of protecting your sensitive information.
That’s part of why so many business owners and enterprise organizations are leaving the physical data room behind. A virtual data room offers greater flexibility, scalability, and digital security that a traditional data room cannot always match. However, before you establish your virtual data room and invite third-party users, you still need to take the proper steps to ensure you have a secure virtual data room. Here’s what you should keep in mind.
1. Establish access permissions.
With the proper access permissions, you can determine who can and cannot interact with your virtual data room on a case-by-case basis. This is fundamental for a secure VDR. For example, during the M&A due diligence process, an IPO, or another significant financial transaction, your virtual data room may host lawyers, investment professionals, bankers, and interested buyers. However, not every one of these participants requires the same level of data access permissions.
A VDR makes it easier to set specific roles for each person and assign permissions that denote how they can interact with any folders, files, IntraLinks, or confidential documents. You can also use activity logs to determine when people are working in different folders, which can help you check your deal health.
2. Set two-factor authentication.
Two-factor authentication is critical for many modern applications, software platforms, and services. Virtual data rooms are no different. Your virtual data room provider can help you implement two-factor authentication, which means that users require more than their username and password to access the VDR. Typically, a two-factor security setup will send a code via call, email, or text to the backup number linked to the user’s VDR account. If the person attempting to log in can’t access this code, it’ll prevent them from proceeding. This can help secure your virtual data room against lost passwords and forced login hacking attempts.
3. Incorporate digital rights management.
DRM is incredibly important for many businesses, especially during mergers, IPOs, and significant transactions. Each folder you upload or file that you add to your digital repository needs its protections, too, especially if you allow users to download specific files to access at their leisure.
A secure data room can leverage digital rights management (DRM) tools to prevent users from sharing folders and repurposing valuable information. You can also use dynamic watermarks to cover your proprietary content and data in a secure way.
4. Review your reports.
There’s more information hiding in your data than you might know. While most VDR setups focus on confidential information and M&A deals, others incorporate robust reporting tools that enable you to review analytics, make adjustments, and get insights from your online data rooms. Reporting is critical for startups, enterprises, and all businesses in between, especially where secure documents are involved. You want to ensure that your deals progress smoothly, and reports can help you push them forward. They can also spot the potential for data breaches.
5. Work with a trusted VDR provider.
Often, it comes down to your choice of virtual data room service. Some virtual data room services have more notable security features than others. When you’re selecting a VDR, it’s helpful that you get insight into individual access permissions, watermarks, Q&A tools, and other useful security features. This can provide you with the extra information you need to make your deal room a secure digital environment.
With these tips, you can create valuable online data rooms, ensure document security, and get valuable insights from corporate records and user data. A secure VDR is a must for your brand.