It is necessary to use special digital tools to organize exchanging documentation with partners. Information leaks occur not only due to the actions of external or internal intruders. This phenomenon is often the transfer of documents to external counterparties through private accounts of public cloud platforms. Using email to send data can be insecure. By transferring information to a public place, the company partially loses control. One document security solution is implemented using due diligence data rooms.
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How does it work?
Virtual data rooms (VDR) are stored in a private cloud or within an organization’s secure perimeter. In this case, the main task is to access information to verified and authorized users. They can work with documents through a standard web interface or special software. The traffic between the client and the storage is necessarily encrypted, and in some cases, the functions of the DRM system can be implemented.
Typically, virtual data room software is used to carry out large corporate transactions, provide access to company reports during an audit, or transfer information to investors. Data Virtual Rooms have the following functions for exchanging documentation:
|Built-in data wiping functionality||Quickly erase text, an image, or an area of a document to protect sensitive data and save time using third-party tools.|
|Removal||Access to the file is controlled by encryption when opening and downloading. Access to the document may be restricted even after downloading.|
|Dynamic watermarks||When viewing, printing, or downloading a document, you can add watermarks over it. The user can configure them to indicate the username, IP address, date, and time of access to the document.|
|Safe Browsing with Safety Net||Data room software assumes the use of restricted viewing mode. This protects confidential data, and the user will be able to see only the central part of the document; the rest of the information will be hidden.|
|Detailed permission system||Specify access rules for each document and folder in the data room. As a rule, this provides several levels of access permissions:
• View through the safety net
• Downloading an encrypted file
• Download PDF File
• Download Source File
|Protected view of spreadsheets||The electronic data room integrated spreadsheet viewer allows you to view and analyze Excel documents online securely. This tool downloads, decrypts, watermarks, and displays documents in any web browser, not PDF, but the original secure Excel format.|
To send files, the user uploads them to the storage of one of the best data rooms, configures access, and sends a link to the recipient. The process can be automated since many developers integrate with file managers, mail programs, instant messengers, and other popular software in client applications. In this case, the upload and download process is not much more complicated. If the documents are protected using DRM technologies, the recipient will have to install special agent software on the computer that controls their use.
Scope of use
The circle of potential customers should not be limited to specific industries. There are the most popular areas where this method of secure document exchange is relevant. First of all, online data room software is needed by financial companies, construction, and design organizations, law firms, communication service providers, and retailers. They often work with critical information and need to send documents to external counterparties or remote branches securely.
- Mergers and acquisitions are the most common use of VDRs.
M&A data room structure is associated with many documents, many of which are confidential and contain confidential information. Working with VDR is a safe and reliable way to exchange any data and documents during business negotiations securely.
- The area of work of construction companies and the production of consumer goods.
Companies often work with each other to produce products during the construction of a building and offer services. During establishing and maintaining a business relationship, frequent exchange of documents and data is required. Data room vendors provide services that store these contracts and make the documents readily available to continue business partnerships.
- Auditing practice.
Regulatory compliance and accounting is common practice in all companies. This process is often a challenge, as workers must interact with external regulators and service providers. In addition, many companies today have offices in remote locations and around the world in different time zones.
- The use of a virtual data room allows for lawyers and accountants.
People associated with paper transactions must be sure of the safety and security of the information they send. Using a central system reduces errors and saves time when working with documents.
- An initial public offering (IPO) is a daunting task that requires a lot of paperwork.
As with auditing, transparency is essential. Companies must create, share, store and manage large volumes of documents. Due to the nature of the transaction, most users will have limited access, such as view only, and copying, forwarding or printing may not be allowed.
In the telecom and financial sector, the used means of protecting user data and marking documents must comply with the requirements of regulators. This is another reason for using VDR due diligence. Moreover, viewing documents on mobile devices and deleting them in the event of an employee’s dismissal also need to be controlled.
Reliability and safety of document flow
Virtual Data Room provides enhanced security for hosted documents based on centrally managed policies. They can be accessed only after authentication. At the same time, the rights are configured much more flexibly than in public cloud services.
VDR allows you to allow viewing of a document, and in some cases, part of it in the browser but prohibits downloading to physical media. Protection against hacker attacks is implemented in the virtual space, and access permission can be revoked or granted for a limited period. In this case, the client software controls the deletion of documents on the users’ side and blocks the download of files located in the storage.