What is a Secure Data Room?

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A secure data room (also called a virtual data room) is a solution using software to manage the sharing of sensitive information with authorized users. It allows businesses to share documents in an organized, controlled and secure way with multiple parties. This includes document tracking, version control, and other advanced features. In the past, businesses have used emailing and spreadsheets to share their due diligence documents however these aren’t secure and can create a host of liabilities if the wrong individuals gain access.

“Secure data rooms” tend to promote how secure their server system is by claiming that they use encryption on their hosting server. This is great, but it does not prevent hackers from hacking into the server. The majority of browsers have tools that allow them to grab high-quality images from documents. Secure data rooms have no power to stop this.

Some “secure data rooms” claim that their systems stop sharing by requiring users to login using 2FA, however this is merely an additional layer of security that does not cover the fact that authorized users are still able to copy and paste link details to others, or forward their own emails using hyperlinks. Secure file sharing solutions that use DRM are a better choice for businesses. They secure the files to a specific device and locations, so they aren’t shared or transferred.