01.06.2022 09:30

Data Room Security: Why Does It Matter?

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Your business could not function without proper security measures. If there was no defense system put in place, your competition would know your next moves, and they would be able to predict where you are going from all the files they would gain access to.

All the sensitive files about your workers would be available to the public, and this would expose them to a lot of negative mental consequences.

Although this might be just a scary thought, there are loads of companies that do not take proper security measures. They could be changing their physical data room into a virtual one, but even if they have already chosen a virtual data room provider, they might still look into how the provider handles security. Why?

Why does safety matter for a virtual data room?

Holding your company’s data in an online, completely digitized storage might already raise concerns, but in reality, it is much safer than a physical solution.

Those documents are not subject to physical displacement, aging, or even physical theft. In this digital realm, all of those things are impossible.

Just because the physical problems a data room has have been solved via technological advancements does not mean that it isn’t subject to new problems available in the space. There are always hackers trying to get at your data.

Cracking passwords, looking for weak points on the website, and many, many more are on their daily agenda. This is exactly why you should take special care of your data room software safety.

How data rooms protect your data

There are a couple of ways data room providers take care of the security of your files. They are filled with features that help with making your documents untouchable to outside threats. Here are the characteristics you should look out for.

1. Compliance with latest regulations

Digital data rooms need to follow the newest file regulations. As it is an online file-sharing site, it has special requirements it needs to follow to be considered a truly safe virtual space. It should be both ISO 27081 and FINRA compliant.

2. Data scrambling

Data scrambling, also known as encryption, is known in almost every industry that deals with some sort of security. Banks, trust funds, financial institutions all utilize this technology, so why wouldn’t it be part of a well-functioning and safe virtual data room environment.

Encryption is the reason why someone wouldn’t be able to understand your files even if they got ahold of them from the server itself.

3. File marking

Electronic data rooms should allow you to mark the files within the digital environment. Each download from the server is watermarked, so if someone downloads the document and shares it with someone else, it is immediately evident who downloaded the document, and where the leak came from.

4. Permission settings

To ensure double the safety, apart from built-in security measures, you can also make sure that only the necessary workers have access to certain documents.

Putting them into groups, and enabling people to just see what they have to see is a sure way of enriching the safety of your company. And it also helps with workflow management, as people are not confused about all of the other files they could also have accessed. They work only on the things that they see.

5. 2FA access

Two-factor verification is already a staple on almost every platform-based solution. To ensure the safety of your documents, employ a password combined with a security token, as it will be much harder to crack if someone targets your business. It is the combination of “something you know” with “something you have.”

6. Reports and logs

Being capable of seeing who accessed your digital space is a great way of keeping track of everything happening at your company. Looking through lots of statistical data will enhance your grip on things.

7. Easy to reach support

If there is something that might go wrong in the virtual data room, and you might not be able to pinpoint the reason why it did, it would be beneficial for you to reach out to the support.

If the customer support is competent and willing to help you in any situation, it will lead to an increase in the safety of your files and an improvement in the overall client-provider relationship.


Virtual data rooms might be an already safe environment for your files, but it is important to check if they have all the latest security measures put in place.

Apart from the built-in features, you might also ensure double the safety with your permission setting management, and reach out to the support team, if there is a problem within the solution.

Following our tips, you should have no problem finding a truly bank-grade solution for all your safe document storage needs.

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