A virtual data room is a device that lets companies communicate confidential information securely. This kind of tool is particularly beneficial during business transactions where outside parties need to scrutinize sensitive information. A VDR can be used as an alternative to sharing the information via email or by physically delivering hard copies. It also enables organizations to track the actions of document users. It also has additional security features like timeouts and auto-expiration as well as reports on the usage of documents.
The ideal VDR provider will be inspected regularly to guarantee the highest levels of security in line with ISO 27001:2013 and GDPR’s requirements. The top providers provide advanced features like dynamic watermarking. This adds a unique label that includes the recipient’s IP address as well as email address to each document to discourage unauthorized usage or sharing. They also provide secure document readers that allows users to view documents without downloading them or expose them to possible risks.
A virtual data room is an important tool for businesses that require collaboration between multiple parties including accountants and attorneys, internal and external regulators, as well as adjusters. By providing a centralised platform for sharing information and communication across time zones and locations, they can save businesses substantial amounts of cash. It also allows them to complete due diligence and take strategic decisions quicker than they could do with paper-based systems. These benefits have made the use of VDRs extremely common, especially in M&A transactions.