A secure data room is a place used for housing data that is of a highly confidential nature. Its goal is to facilitate the exchange of documents for legal processes, M&A transactions, etc. They can be virtual or physical. However, with the rise of technology, virtual data rooms have become increasingly popular because they are cost efficient, user friendly and are backed by a variety of security measures.
While standard cloud storage can be used for non-confidential files, a virtual data room is a perfect solution for sharing confidential documents particularly due diligence files in M&A deals and venture capital transactions. They are equipped with a multi-level security system of security, including encryption and dynamic watermarks, which prevent the dissemination of information without authorization, and two-step access verification. Some data rooms online offer activity reports, which reveal who has accessed which files and the time they accessed it.
When choosing a provider be sure that they have the following essential functions:
Granular permission controls that permit administrators to define specific viewing and downloading rights for each document. Search function enhanced to detect specific and partial matches between documents and folders with OCR, filters, and full-text searches. Upload all documents into one folder, and have them automatically indexed to make it easier to locate. NDA pop-ups which can be displayed when a document is downloaded or view to ensure users have read and agree to the terms before they can access. The ability to create groups with different rights and assign roles. Real-time document translation to remove barriers to communication that could slow down collaboration processes in global M&A deals.
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