Secure data rooms protect every document as they move between servers and are stored, unlike file sharing and storage services like Dropbox which only protect files during the uploading and downloading process. This is crucial to prevent hackers from getting access to information in the event that it gets lost.
However it is vital to remember that most data rooms are only as secure as the security measures implemented by the server hosting them – so while encryption of data while it is in storage is vital, it’s still not enough to ensure complete security. Additionally, it’s important to determine if a virtual data room’s software encrypts temporary files created by downloading documents to the browser – if not, it could result in thousands of documents that are not protected in the clear on a server that could be easily compromised.
Another key feature is the capability to add personal notes to a document that are only viewable by the person creating them – this minimizes the chance of third parties seeing confidential information, and also improves collaboration during due diligence. Secure datarooms have dynamic watermarks that are updated in real-time to block uninvited sharing of files. They can also be used to trace the source of a document if it is leaked.
In the end, ensure that the data room is in line with the industry standard security practices by verifying that it holds ISO 27001 certification or other similar assurances. You should look for a room that has strong encryption and detailed reports on access and activity.
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