Data breaches are associated with hefty fines, but did you know that these penalties can reach hundreds of millions of dollars? The biggest fine ($1.19 billion) for data privacy violations was paid by Didi Global in 2022. Similarly, an American credit card company paid more than $500 million in fines for data breaches in 2019.

Monetary losses are not the only setback that a company has to go through after a data breach. It also results in a loss of trust by customers and investors, ultimately resulting in a decline in share prices. The threats to data breaches can be minimized or even eliminated by employing up-to-date and fully controlled data management solutions like virtual data rooms.

Virtual data rooms: The new face of secure data management

Cloud solutions were a revolutionary step in information handling, but they came with drawbacks. It is easier to break into a weak cloud-based data repository as it can be accessed from anywhere.

However, virtual data room software not only gives the luxury of remote accessibility, but its multi-layer security system makes it impossible for hackers to steal content even if they somehow manage to get into the data room software.

Online data room software, in addition to its unbreakable cybersecurity, simplifies multiple administrative processes. Here is an introduction to the data room software and how it benefits the business fraternity. 

What is virtual data room software? 

Virtual or electronic data room software is a cloud-based data management solution that businesses, public institutions, and nonprofit organizations use for their data management needs.

The software boasts the latest tools for data sharing, editing, scheduling, and archiving. Furthermore, data room software provides basic to advanced tools for online business meetings and communication.

Data room services for deal management also provide tools for task management, project management, and pipeline management for transactions like IPOs, capital raising, and M&As. Read more about M&A virtual data rooms and their benefits at: https://datarooms-review.com/due-diligence/. 

Why are virtual data rooms important for businesses? 

Data rooms primarily eliminate inefficiencies in data management and provide modern-day digital protection. Here is why they are important for your business. 

Streamlined data management

As the remote work culture progresses in the corporate world, businesses are rapidly shifting to cloud data management solutions. Data room software is a top choice for millions of businesses and professionals because it:

• Allows you to store hundreds and thousands of documents online, as most of the data room providers offer unlimited storage space (based on the package you choose).
• Provides built-in tools for viewing, editing, sharing, annotating, or performing other functions on documents. You can also make real-time changes in your files.
• Simplifies data accessibility. The best data room providers offer unique features like smart search and full-text search, which allow users to access or locate any file by simply using keywords or phrases. You can also preview a file before opening it.
• Gives you the luxury to schedule file sharing at a future date. 

Premium-grade security

Security is the primary selling point for data room vendors, as the technology is mostly used in dealmaking. For example, mergers and acquisitions are the biggest use case of data room technology. The process includes data sharing in huge quantities, and both parties (sell-side and buy-side) communicate regularly.

Data rooms secure the data at all stages. For instance, the multi-factor authorization feature keeps unauthorized users away from the VDR. Also, the sell-side can exercise control over how the data is shared, accessed, or used in the VDR.

The data room administration can define access roles for all users, revoke access to documents, disconnect and purge any device connected with the VDR, and track users' activities. Advanced features like fence-view mode protect sensitive files from unsolicited viewing.

Protip: During the data room review process, always make sure that the vendor is certified by your industry regulatory authority, such as FINRA, HIPAA, FISMA, etc. 

Complete virtual workspace 

 Electronic data room software is a full-scale virtual workspace for any business type or size. The administration can create multiple projects or data rooms for different teams or departments and segregate organizational data according to their needs.

VDRs also provide online meeting management tools to schedule and manage meetings effectively. You can prepare meeting agenda, record notes and meeting minutes, cast online votes, sign documents, distribute meeting minutes, and assign and track tasks during and after meetings.

Cost-effectiveness 

Virtual data rooms are not only affordable for SMEs, but they also reduce different administrative expenses. They minimize the need for paper documents, thus reducing stationary and printing expenses. 

Second, businesses don't have to buy and maintain costly data management solutions. 

Wrapping up

Online data room software is a digital document repository commonly used to share and manage information in business transactions. It provides industrial-grade digital protection and is cost-effective in various ways. Some of the best data rooms include iDeals, SecureDocs, ShareVault, DealRoom, and Merrill.