A secure dataroom (also called a virtual dataroom) is a software that lets you to share sensitive information with other parties. It enables 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 spreadsheets and emailing to share their due diligence documents however these aren’t secure and can lead to a myriad of liabilities if the wrong people have access.
Some “secure data rooms” are very vocal about the security of their server systems are by affirming that they have encryption while on the hosting servers which is great however, it does nothing to stop non-authorized users from gaining access and even if did not, the server hosts thousands of temporary files that contain the contents of your document that can be easily downloaded by hackers using screen graber software. Many browsers also come with built-in tools for capturing high-quality images of document pages and there isn’t much secure data rooms can do to stop these from happening.
Certain “secure data rooms” claim their systems prevent sharing by requiring users to sign in with 2FA. However this is just an extra layer of security which does not address the problem that users who are authorized are able to copy and paste links to other users or forward their own emails with hyperlinks. Secure file sharing using DRM are a better option for businesses. They restrict the files to certain devices and locations, meaning they aren’t shared or redirected.
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