Think of a VDR as a digital replica of a windowless brick-walled room, in a building nobody knows about, and with a tamper-proof lock. The key to entry is a system that verifies who you are, where you are, and what you know (multi-factor authentication).
Technically, it’s a cloud-based secured online repository for document storage and distribution. Over the years, VDR solution providers have solved the data security problem for leading firms, across industries. The service brings together state of the art technology with a host of added security features.
The result – reliable document storage, whether it’s a design prototype of an airplane’s waste disposal system, or a press release announcing the merger of two banks.
Here’s how VDRs help solves the data security problem.
State of the Art Encryption
Cloud-based document storage solutions use web application firewalls to keep unauthorized access requests at bay. VDRs use this, and a lot more, to deliver unmatched security.
Encryption is the core data security principle in action, across cybersecurity products. Where’s the difference, then? Well, products that use the latest encryption technology, and use multiple layers of encryption, deliver the best-in-class security.
Take ContractZen for instance, a suite of secure document management and collaboration tools, including contract management and dedicated data rooms. Global businesses like Total and JCDecaux trust the tool because of the best-in-breed encryption on offer.
All documents stored in a ContractZen data room are encrypted using RSA 256 protocol, which means there’s literally zero risks of someone being able to backdoor their way into the storage area to steal the data. Moreover, all connections established with the service are encrypted using Symantec SHA 256 RSA SSL.
The result – a two-layered system of encryption that prevents unauthorized access to data via snooping, and makes the data incomprehensible to anyone who still manages to access it without authorization.
International + Industry-Specific Compliance
As someone tasked to choose from a number of virtual data room services, you need a yardstick to evaluate each. The most practical approach is to identify the compliance status of the tool.
A compliance standard factors in multiple security parameters, and accredits a tool with a compliance status accordingly. Leading VDR tools pursue the most stringent compliance standards, for obvious reasons. Some of these are:
- ISO 27081: the international compliance standard to provide for the secure storage of personal identifiable information (PII) in the cloud.
- ISO 27001: the international compliance standard to provide for the security an organization’s information risk management processes, on a legal, physical, and technical front.
- ISO 27018: the international compliance standard to provide for the protection of PII for the public cloud.
- FINRA: compliance by the Financial Industry Regulatory Authority protecting investors by ensuring the cybersecurity vendor operates fairly.
- FedRamp: a standardized approach towards cybersecurity based on secure, quick, mobile, and nimble information technology, focused on the cloud.
- SOC2: Service Organization Control pertaining to data security for financial documentation.
Then, VDRs ensure reliability for use in different parts of the world, by complying with geographic cybersecurity standards such as EU Model Clauses, Singapore MTCS, UK G-Cloud, and Australia CCSL (IRAP).
Document Permission Management
The most crucial technical component of a VDR is the granularity control over ‘who can do what with what data’.
Simply put, it’s the technology that allows a VDR to restrict a document to a view only, comment only, prints only access state. This ensures that:
- Data can not be viewed by any unauthorized person
- Nobody can create copies of documents unless they’re authorized to
- A document can not be edited unless it’s supposed to be edited
- A document can’t be printed unless the VDR process owner determines otherwise
- Only a specific part of a document can be accessible for specific individuals, to ensure the other info in the doc remains inaccessible
- Specific persons can have the edit right to a document while others in the group only have a view right
This means that the VDR process owner has full control over document access, preventing the risk of inadvertent information leakage.
Audit Log & Reporting
A powerful functionality that makes VDRs a preventive cybersecurity solution is – audit logs.
The audit log works on two levels:
- The document level
- The user-level
This is the kind of information a robust VDR can report:
- Who’s looking at which document at the current time?
- What’s the IP address, device, and location of the user currently accessing the document?
- At what time did a user access a document over the past several weeks?
Moreover, VDRs allow you to build reports that help users identify anomalies in data access patterns. This goes a long way in helping companies prevent data leaks and potential misuse of the data in the VDR, by any of the authorized individuals.
Multi-factor Authentication
VDRs ensure that only authorized users access the data stored in the cloud by following a layered authentication approach.
A single level of authentication based on passwords is not enough, particularly because:
- Users tend to use the same password for different services
- Users do not choose strong passwords because of the risk of forgetting them
- Users don’t change their password until the enforced password policy’s maximum duration expires
Organizations can’t afford any of these risks, which means VDRs have to enforce another level of authentication. This is done by registering an end user’s device (a laptop or smartphone) with the VDR, and then issuing a one-time password/code on the registered device.
VDR’s also allow for secure single sign-on options for organizations to look for such a facility.
Parting Thoughts
You’re not alone in your fear of cybercrime. Data is the binary form of your reality, and your reality deserves security.
Trouble is, even the most momentous financial transactions are not immune from the risks of data theft. A report from a reputed firm recently estimated that 42% of the biggest mergers of the recent past suffered from information leaks. That’s information directly linked to at least $5 billion in value, unsecured. No wonders, global companies entrust their all-important data to VDRs. The reliability, trackability, and control offered by a VDR are a must-have for organizations for whom data is invaluable.
