What is a Secure Data Room?

A secure data room (also called a virtual data room) is a software solution to control the sharing of sensitive information with authorized stakeholders. It allows businesses to share documents in a controlled, organized and secure manner with multiple parties. This includes document tracking, version control, and other advanced features. Traditionally, companies have relied on emailing and spreadsheets to share their due diligence files but they are not secure and could result in a range of liabilities if the wrong people get access.

“Secure Data Rooms” like to boast about how secure their server system is by claiming they use encryption on their hosting server. This is great, however it doesn’t stop hackers from hacking into the server. Most browsers have tools that allow them to capture high-quality images from document pages. Secure data rooms have no power to stop this.

Some’secure data rooms,’ claim that their software blocks sharing boardroom security by requiring users to sign in using 2FA. However this is just an additional layer of security which doesn’t address the fact that users who are authorized are in a position to copy and paste links to other users or forward their own emails that contain hyperlinks. Secure file sharing solutions that use DRM are the best option for business. They restrict the files to specific devices and locations, which means they can’t be shared or transferred.