Did you know that, on average, a data breach at the corporate level costs $4.35 million, while this figure is expected to be over $5 million in the coming months? What’s more, the most common types of data breaches include phishing attacks, identity theft, employment-related breaches, and personal data breach.
Cybersecurity is a matter of top priority for any competitive business and an integral part of corporate data management practices.
Despite unprecedented efforts to create a safer digital world, cybercriminals are still making their way in. How to minimize these risks? One reliable and certified way to do it is the use of virtual data rooms.
What is a virtual data room?
Virtual or electronic data room software is a cloud-based, fully controllable document repository for all types of business data management needs. Anyone using data room software can share, store, access, or distribute documents and files to any number of users in the data room.
The software also provides a full range of document management tools such as file editors, document or Excel file viewer, annotations, text highlighting tools, and whatnot.
In simple words, online data room software is not just an ordinary storage tool; it is a complete data management solution.
What’s more, current-day data room services are not limited to specific industries or businesses. VDR technology is employed in almost every sector for different purposes, such as mergers, acquisitions, crowdfunding, fundraising, and asset trading.
Secure data management with virtual data rooms
Investors interested in a takeover can immediately back off from a transaction even if they get a minor hint of due diligence data being prone to cyberattacks.
If you are not investing in secure data-sharing methods for M&As, you are already repelling a lot of good investors, says, (Angleo Dean – CEO datarooms.org). Here is a complete cybersecurity M&A due diligence checklist to make sure your data room is set up right according to the regulatory authorities in your area.
01. Streamlined due diligence
As mentioned by Dean, cybersecurity is a pivotal point in M&As as there are tonnes of documents to be shared, viewed, and exchanged over the course of days, weeks, or even months.
Cybersecurity concerns can immediately turn off investors, and this is exactly what happened Facebook tried to acquire Musical.ly (the predecessor of TikTok) back in 2016. The deal was called off when Facebook realized that Musical.ly’s data is prone to cybersecurity risks in China.
Virtual data rooms are a highly sought data-sharing platform for M&As and activities alike. The best virtual data room providers like iDeals, Ansarada, Merrill, or Caplinked are:
- Certified by notable organizations like ISO, FINRA, SOC, GDPR, and HIPAA
- Fully equipped with the latest security features like data encryption, document access control, and audit logs or activity reports (data room security is explained below)
You can compare virtual data rooms on review websites like G2, Capterra, and Software Advice.
02. Premium data security
VDR technology is built on one integral principle—data security. The depth of virtual data room security mechanisms is simply unparalleled. Your business is protected at every stage in different ways.
For instance, there are numerous features like two-step verification, device removal, device purging, and VDR access revocation that make it impossible to break into a VDR or steal something.
What’s more, there are additional layers of document protection to add ice to the cake. You can control the document access in your data room just the way you want. You can decide who can or cannot:
- Access a file or any segment of a document
- Share, edit, remove, delete, annotate, print, download, or copy any file
Similarly, you can track activities or actions performed on a file with the help of digital watermarks; the feature also prevents copyright strikes.
Fence-view is a relatively newer but one of the most demanded security features and is available only in some of the best data rooms. It gives you the option to simply hide any line, paragraph, or section in the document.
03. More efficient data management
Just as mentioned above, online data rooms provide a wide range of data management tools. For example, you can:
- Segregate documents into folders and subfolders at your convenience
- Annotate, edit, delete, or alter documents depending on your authority in the VDR
- Drag and drop files into the VDR
- Upload files in bulk to save time
- Access any file by simply using a keyword or a text phrase from the document
Other important features include document version control, file tracker, and templates for commonly used corporate documents.
Rounding it up
Online data room software is a game changer in the field of online data management. It provides everything you need to keep your data fully secure, especially when sharing it with external parties during fundraising, asset trading, mergers, acquisitions, or divestitures.
