Protecting Sensitive Documents in Data Room
The due diligence process for mergers and acquisitions entails sharing sensitive documents with various stakeholders. These confidential documents must be protected from unauthorized access, theft, or leaking. In contrast to the traditional filing cabinet system, in which physical copies of documents are required to be viewed by multiple interested parties simultaneously virtual data rooms facilitate the process by allowing contributors to connect remotely. Additionally, they make the process of due diligence by allowing users to find and retrieve specific documents in seconds.
The structure of folders in a virtual room is designed to make it easier for users to navigate. Many VDRs, such as, use a top down method of splitting files into main folders that correspond with different types or stages of a deal. They then divide the folders into more convenient subfolders for easy searching and viewing.
Virtual datarooms typically have granular settings for permissions that let users decide what they are allowed to view and for how long. These settings protect important files from falling into wrong hands, a costly mistake that could ruin the entire transaction. In conjunction with audit logs this function provides double security for your personal files.
Other security measures include dynamic watermarking, which displays a warning message or document status (for instance confidential) on the document. This feature can also display the user’s name and IP address, as well as the date and time of viewing. When choosing a provider of a secure dataroom, it is important to take these features into consideration. A reliable service must possess at least one of these capabilities and support a variety of file formats.