What Is a Secure Data Room?

Secure virtual data rooms have become the standard for sharing documents for business. They enable companies to communicate sensitive information to external parties without the risk of a data breach and losing valuable information. Especially in the case of M&A, where multiple parties must review crucial documents for business, a secure VDR is a vital tool.

In fact, it is now a mandatory ideals requirement in a lot of cases to use a reliable secure VDR solution to reduce the risks of costly data breaches as well as unauthorized access. Data breaches can result in serious reputational and financial implications for both businesses.

A secure data room is an online repository of documents that multiple users need to access at the same time. The platform offers secure, centralized storage and distribution of documents that is used for due diligence in M&A transactions and for various other business needs.

One of the most frequently-asked questions about secure virtual datarooms is whether or not they block authorized users from sharing their documents with non-authorized parties. Some vendors claim that their systems stop this by extending login using 2FA, or by putting watermarks on downloaded PDF documents. But the truth is these methods are not infallible and can be beaten with ease.

The healthcare and life sciences industry, for instance has led to an increase in the amount of confidential documentation. This includes clinical findings as well as patient data. Having such critical information accessible to multiple unauthorized parties can result in competition espionage and regulatory issues as well as costly legal action. A secure data room can help keep this from happening by providing features like remote data control, secure messaging and an Q&A tool.