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The security of confidential information is essential during business processes and transactions. Virtual data rooms permit users to store and share confidential documents in a secure environment. Typically, they are used to conduct due diligence in M&A deals however, they may be used for other purposes too.

The best VDRs offer a range of options to ensure that documents are stored securely and shared during the course of a deal or process. They can, for example include two-factor verification which requires not only the password is used, but also factual data and codes that are unique to each user. This reduces the risk of data breaches caused by compromised passwords. Many VDRs also provide granular access rights that allow access to certain files. Another option is IP restriction, which limits access to the virtual data room only to a specific IP addresses. This protects sensitive data from being downloaded to unauthorized devices and prevents leaks.

Other features available on some VDRs include watermarking, which shows an immovable identifier for each document, and audit logs, which track the actions taken on the files in the data room. They are used to determine who has been able to access or modify files, and can be used in the investigation of data breaches. Secure spreadsheet viewing is a useful feature. It assures that Excel documents can only be viewed by specific users.

When choosing a data storage facility, be sure to check its certifications and standards to confirm that it provides the appropriate level of security for your documents. Idealy, it should be PCI DSS Level 1 ISO 9001 / ISO 27001 FIPS 140-2 MTCS Level 3. Some investment banks have an approved list of companies that offer data rooms with whom they are comfortable working. You should choose an organization that has these qualifications and has a positive reputation within the industry.