The security of confidential information during financial and business transactions is crucial. Virtual data rooms are generally used to share and store private documentation in a secure setting that allows users to access it with a restricted access. Generally, they are used for due diligence purposes during M&A deals, but they can be used for other reasons as well.

The best VDRs come with a variety of features to ensure documents are safely stored and shared throughout a deal or process. They can, for example, include two-factor verification, which requires that not only the password is used, but also the actual information and codes specific to each individual user. This minimizes the risk of data breaches that are caused by compromised passwords. Many VDRs offer granular permissions that restrict access to certain files. Another option is IP restriction, which restricts access to the virtual data rooms to specific IP addresses. This protects sensitive data from being downloaded onto unauthorized devices and stops leaks.

Other features offered on some VDRs include watermarking, which displays an unchangeable identifier to each document, and audit logs, which record the actions of the data room’s files. They can be used to determine who has accessed or modified files, and they can also assist in the investigation of data breach. Other features that are beneficial include secure spreadsheet viewing, which makes sure that the contents of Excel files can only be viewed by specific users.

When choosing a data storage facility, be sure to check its certifications and standards to ensure that it offers the right level of security for your documents. It should be PCI DSS Level 1, ISO 9001 / ISO 27001, FIPS 140-2 and MTCS Level 3. Some investment banks have a list of approved vendors that lists data rooms they are happy to work with. You should look for an organization that can demonstrate these qualifications and has a positive you could check here reputation in the field.