Data Rooms are a solution for sharing and storing confidential documents that are used in business processes and financial transactions. Contrary to physical storage that is dependent on security measures such as security cameras and locked rooms or the presence of a lawyer to ensure privacy, Virtual Data Rooms (VDRs) are accessible anytime from anywhere with an internet connection.

VDRs are typically more secure than platforms like Dropbox, Google Drive, and email because they’re specifically designed for enterprise-grade document management, with features like multi-factor authentication, granular access control, and data leak prevention technologies. This includes encryption of data-at-rest and features to prevent accidental or malicious deletions, such as the ‘view as’ tool and dynamic watermarking.

It is important to keep in mind that even the most secure platform isn’t an absolute solution human error is likely to always occur. It is essential to choose a VDR with features that reduce the chance of errors, for instance an audit trail that tracks every action within the VDR and a user log that lets administrators know the time when users have accessed or modified sensitive data.

Additionally, certain VDRs also come with advanced artificial intelligence capabilities that can simplify collaboration and file management by automating repetitive tasks. This can help accelerate the process, keep files organized and ensure that no documents are duplicated. This is particularly helpful when conducting due diligence on M&As, construction projects, or other situations that require large files to be exchanged between parties.