The security of your confidential documents is dependent on where and how you choose to store and share them in the course of completing certain business processes and transactions. The safest way to ensure that your information remains protected during M&A, litigation, compliance, or other mission-critical processes is with a virtual data room equipped with the appropriate tools and features to keep your data safe.
This article will illustrate the importance of using a virtual data room for mission-critical processes that require the sharing of sensitive documents with third parties, and what distinguishes a VDR from generic document sharing services such as Google Drive, Dropbox, and Email.
How Do You Currently Share and Control Your Documents?
Sharing documents has never been easier than with the convenience of the Internet. While the Internet has made communication amongst multiple parties from anywhere around the world fast, simple and efficient, it has also resulted in threats to companies’ cybersecurity and document control. These threats can stem from something as unavoidable as human error or larger oversights that could have been avoided with the right document sharing software. It shouldn’t take an unexpected leak, the misplacement of a sensitive document by an employee, or a more sinister hack for your company to consider better options for the protection of confidential information, such as HR documents, third-party contracts, intellectual property, internal financial information, etc.
A few notable companies that can attest to the importance of online data security are Yahoo, Target, eBay, and Equifax—all of which experienced security issues that allegedly put client names, dates of birth, passwords, social security numbers, credit card information, and more at risk. These clients were left vulnerable and were subsequently entitled to compensation that cost the aforementioned companies millions. Furthermore, when a company is considering a merger or acquisition, breaches like these can knock a substantial amount off of a company’s sale price, or even scuttle a deal. If a hack can happen to household names such as these, then it can happen to any business, which is why it’s important to recognize any weaknesses in your current method of sharing documents and attempt to immediately improve your security before it is too late.
Why a VDR is Better
A secure virtual data room is your best bet in ensuring that all confidential information used in various business processes or financial transactions remains in your control and safe at all times. It’s more complicated than simply keeping your information under lock and key. The success of business processes and deals routinely requires the sharing of massive amounts of documents with third parties beyond the corporate firewall. You need a tool that delivers the right balance of accessibility and control.
The ideal virtual data room is simple to use and easy to navigate, allowing users to effortlessly upload, access, and review documents in an organized and efficient manner. It takes the guesswork out of how to secure your data and instead offers multiple features that defend against unwanted third parties gaining access. With a VDR, you control who sees what information, and when, and can track who has viewed what documents.
Some VDRs also provide features for administrators that decrease the likelihood of human error. For example, with a Firmex Virtual Data Room, not only can you manage Users and Groups, add users, and set group-level permissions, you can also use the ‘View As’ tool to verify exactly what users will see before they enter your data room. This security “spot check” provides assurance that everything is set up correctly before you invite anyone to enter the data room. If you permit documents to be downloaded and printed, electronic watermarks are a way to keep track of any documents that leave the VDR, and can hold any negligent parties responsible if they are misplaced. Audit logs offer the ability to trace all document activity within the data room and monitor who has viewed the information, for how long, and if any other users have gained access to it in the process. VDRs are also equipped with a range of industry-strength security features for peace of mind that the documents you rely on for a transaction or to close a major deal will stay exactly where you want them.
What Not To Do
A virtual data room is an indispensable tool for controlling and safely sharing your confidential documents, however, some companies and individuals still opt for less secure platforms such as Google Drive, Dropbox, or email. Granted, not all company data is confidential enough to require a more specialized method of storage and sharing than Email, Google Drive, or Dropbox, however, your financial information, IP, or litigation documents are. They should be entrusted to software that can rival the potential risks if they were to be leaked. The security of your business and its employees should not be taken lightly and anything other than a VDR just won’t cut it when it comes to organization, ease of use, and a collaborative space impenetrable to undesirable third parties.
Generic cloud-based services, while typically inexpensive or even free, can cost your business a lot more in the long run in the case of an unexpected hack. In 2012, Dropbox fell victim to a leak of more than 68 million users’ email and password data. The users were notified of the potential threat and preventative measures were taken, but for professionals, this incident should serve as a wakeup call: Do you really want to leave your confidential documents vulnerable simply because you chose a generic file sharing service over a specialized one?
Corporate email is another ubiquitous tool that may not be up to the task of sharing your most sensitive documents. Remember that if an email server that has been used to share confidential company data is accessed, a hacker will be able to view everything previously shared, threatening the security of every document you may have sent or received. Think about what sensitive documents may be sitting in your inbox or sent items folder right now as attachments, and what could happen if these were to fall into the wrong hands.
There are good reasons why professionals trust a virtual data room as the best option for securely storing and sharing any confidential company information during deals and transactions. When the stakes are high, and a successful outcome depends on sharing sensitive documents, do not trust your most sensitive documents to ill-equipped platforms because you never know who may be waiting for the opportunity to intercept vital confidential information, or how well a generic service can protect against it.