Virtual Data Rooms are online repositories that permit secure storage, sharing, and management of sensitive files and documents during due diligence processes. They utilize a combination of security measures that include data encryption and multi-factor authentication, as well as access control to block unauthorized access. They also ensure security across different geographical regions by adhering with various cybersecurity standards for geographic areas, such as EU Model Clauses (EU Model Clauses), Singapore MTCS (Multi-factor Authentication System) and UK G Cloud.
VDRs are designed to be used for due diligence in mergers and acquisitions. However, they can be used for other business reasons as well. For example, commercial real estate transactions generally require large volumes of documents that need to be shared quickly between multiple parties. These documents may include financials, architectural plans as well as detailed information about the property. These files are too large to be sent via email or any other online tool, but they can be uploaded to a VDR where they can be viewed only by authorized parties.
The best VDR for data security has a number features that enhance security for users and documents. For example two-factor authentication requires users to enter not just a password, but additional information or codes when logging into the VDR. Additionally to this, the best VDRs allow users to track who is viewed which documents at what time. This is a crucial preventive security feature that is able to detect patterns of activity that could be a sign of unauthorized access. The most reliable VDR providers also offer options that allow administrators to instantly remove user privileges and create reports on all user activities to spot any irregularities.