Secure data rooms encrypt all documents as they transfer between servers and are stored, as opposed to file sharing and storage services like Dropbox which only encrypt files during the uploading or downloading process. This is crucial to prevent hackers from accessing your data when it’s lost.
It is important to remember that the security of a majority of data rooms is only as strong as the server that hosts them. Secured at rest encryption is essential, but it is not enough to guarantee total security. In addition, it is worth asking whether a virtual data room’s system is able to encrypt temporary files generated by downloading documents to the browser. If not that could mean thousands of documents unprotected sitting unprotected on a server which could easily be hackable.
A major feature is that you can include notes to documents that can only be viewed only by the person who wrote the document. This reduces the chance of third parties gaining access to confidential information and enhances collaboration during due diligence. The most secure datarooms include dynamic watermarks that change in real-time to block uninvited file sharing. They can also be used to track the source of a document if it is leaking.
Verify that the virtual data room you’re considering is in compliance with industry standards for security by checking if it has ISO 27001 or similar certification. Also, look for a secure data space with strong encryption techniques and offers detailed reports on user access and activity.
