Virtual Data Rooms: Your Virtual Environment for Privacy and Security

Virtual Data Rooms: Your Virtual Environment for Privacy and Security

Globalization introduced its own benefits in the field of business. Firms have expanded their operations to different parts of the world, and international mergers and acquisitions have become more common. The biggest challenge for the corporate sector was managing such cross-border M&A transactions. With online data room software, traders can now carry out business-changing transactions over the Internet.

But are virtual data rooms only effective for mergers and acquisitions? Data room software is a multi-dimensional solution that can meet different needs of all kinds of enterprises. Read on to explore the world of the virtual data room.

VDR for Ensuring Data Security

Virtual data rooms offer many document security features that protect company documents and sensitive user data against hacking. Document security features range from watermarking to data encryption with customer encrypted keys. The main methods for ensuring data security when using dataroom software will be discussed below.

Dynamic watermarks

Dynamic watermarks are automatically added to each document that is downloaded from the virtual data room. The watermark can include the download date, project name, name, and even the IP address of the person who downloaded the document.

Document expiration

Sometimes referred to as “self-destructing document” or “remote destruction”, this security feature allows you to revoke access to the document at any time, even if the user has already downloaded the file. This document protection feature prevents unwanted distribution of documents.

Limited display

This document security feature allows you to block part of the screen while viewing a document in a web browser. This prevents security breaches such as unwanted viewing in public places, the use of cameras to attack, or screen capture.

256-bit SSL encryption

256-bit AES SSL encryption is the gold standard for e-banking and e-commerce transactions. Check the highest standard of data encryption when transferring data to a virtual data room and vice versa, as well as while the data is stored there.

Document access restrictions

Document security policies allow you to specify custom levels of document security. For each document in the virtual data rooms, you can define rights to view, share, edit, or download the original or watermarked document. The Print Screen button may also be restricted. You can define document access rights for each user of the virtual data room.

Data backup

Data backup adds another layer of document security, ensuring that documents transferred to the virtual data room cannot be lost or damaged. Look for a data room service that offers real-time file archiving via encrypted VPN tunnels.

Virus scanning

Virtual rooms automatically scan all uploaded documents for viruses or other defects. Most VDR do not allow the transfer of corrupted files.

Security and encryption

With open source encryption technology, documents are automatically encrypted on opening to prevent unauthorized access through an unsecured network. Open encryption will ensure that documents are protected during storage, while remaining unreadable to unauthorized persons.

Legal Security Measures

Virtual data rooms reside in physically secured data centers with multiple security measures that restrict access to sensitive data.

SOC 2 certificate

SOC 2 is a data center certification that includes an internal best practice statement to verify the security, availability and privacy of the deployed virtual data repository.

ISO 27001 certificate

ISO 27001: 2013 is the most stringent international certification for information security in the information technology sector. This standard provides adequate controls to prevent security threats or vulnerabilities.

SSAE 16 certificate

The Standard 16 Compliance Statement (SSAE 16 -Standards for Attestation Engagements) is one of the strictest standards requiring an audit of internal financial reporting controls. Most commonly required in M&A data rooms, SSAE 16 certification means that the virtual data room complies with standards supporting the Sarbanes-Oxley Act (SOX) – an act that regulates financial practices and corporate governance.

Data Security Center

Data centers employ physical security, strict access policies including biometric authentication systems, armed security and surveillance, secure vaults and cages with uninterruptible power, backup systems, and data center flood and fire prevention systems.

Access to Security

Providing access to the right people is an integral part of an effective virtual data room. Permissions must be strictly managed, and the provision and limitation of access must be thoroughly checked. Access to security policies and anti-breach features will stop unauthorized logins or block access to certain information. Know more about virtual data room services, look for useful information about software features, and find your perfect secure VDR. A virtual data room offers:

Access from mobile devices

Virtual data rooms can provide access control of documents secured by mobile devices, offering specialized applications.

Multi-invoice authentication

This access security feature increases the level of protection by requiring users to verify their identity on another device in order to gain access to their data. This step prevents damaged or stolen devices from accessing the data room.

Collective access

The virtual data room owner can create groups with predefined permission levels. This feature helps in user management and also adds an extra level of security.

User multi-level permissions

VDR administrators can define the level of document access for different users and user groups, improving security in data rooms and keeping traces of data activity in the room.

Fine-grained access control

A virtual data room administrator can provide granular or role-based access control access to the data room. Separated permission settings allow you to control who has access to each file or folder based on the user’s role in the contract or position in the company.

Two-factor authentication

Two-factor authentication secures an additional level of defense. Users can log in using a password and a text message with a unique verification code sent to the mobile phone.


If you have read this entire page, you already know the exact answer to the question posed in the title: what is a virtual data room? However, if you only read the summary – here it is. In short, here’s what you need to know. VDRs:

  • are secure online platforms for sharing and storing documents;
  • may or may not require software to be installed;
  • run on a variety of devices and operating systems;
  • store customer data on their servers;
  • allow you to store an unlimited amount of data;
  • have many advantages that put them in front of physical data rooms and cloud storage;
  • are used by various companies;
  • are especially important in mergers and acquisitions, audits, fundraising and intellectual property rights management;
  • allow companies to save time, money and effort.

Electronic data room is a digital platform where you can safely store and share confidential documents.

About Author

Dana Cull

Dana is a digital content creator with a self-confessed obsession with writing. She is also an avid reader and loves to spend her leisure hours watching documentary films from different directors across the world.