Data protection has various uses and helps provide security for legal transactions and other sensitive documentation. Deal or data rooms offer multiple-purpose applications, such as due diligence, M&A, capital raising, IPOs, and more. Here’s how to use a deal room to protect your legal documents:
1. Data Encryption and Access Control
Deal rooms provide encryption protocols to secure data from unauthorized access. With this security protocol, only those with authorized access can open encrypted documents. A deal room also allows administrators to control specific information that can be made available to third parties. Other security features are available to control specific portions of documents to be made viewable for personnel. They can restrict users from downloading or saving documents in a data room. These security measures keep unauthorized individuals from viewing, editing, or downloading specific documents.
2. Multi-factor Authentication
Data rooms incorporate multi-factor authentication to provide an extra layer of security. With multi-factor authentication, users must verify their identity through a secondary method in addition to a password. The secondary factor mitigates the risk of unauthorized access.
3. Watermarking and Tracking
Virtual data rooms (VDRs) often incorporate document tracking features like dynamic watermarking. Dynamic watermarking involves embedding unique identifiers onto documents, making them traceable to the users who accessed them. You can configure watermarks to show the user’s email, IP address, and the day and time they opened a document. Watermarking shows that the document is confidential and deters unauthorized sharing. The ability to track document usage gives administrators insights into who viewed a document and what they viewed, enhancing accountability and security.
4. Regular Security Updates
Data room usage insights make it easier for administrators to identify inefficiencies in the security system. The team helps develop and address any vulnerabilities and gaps identified during an audit. These recommendations provide security software and hardware updates, implement new controls, and secure data rooms from the latest cybersecurity threats.
This process is complex and has key steps that requires careful planning to provide and improve security systems, processes, and procedures. Security systems are reviewed to update and protect sensitive information.
5. Using Document Collaboration Modules
Data collaboration modules keep track of the communications and changes made by each user, providing accountability. Change tracking automates saves for each document version after changes, preventing information loss. Data rooms mitigate this risk by providing document collaboration modules where users can edit documents within the secure VDR environment. Administrators can assign users specific privileges relating to their role in legal proceedings.
6. Automatic Access Permission Expiry
Document security also includes managing the lifecycle of access permissions for sensitive documents. Data rooms allow administrators to set automatic document access expiration dates. Once a document is no longer needed, you can revoke access to all document copies, including downloaded versions. This data room feature keeps records secure even after they are no longer used.
7. Integration with Secure Communication Systems
Integrating your VDR with high-security communication channels, like encrypted messaging systems and secure email services, enhances document safety. Maintaining communication and document exchange over secure platforms lays the foundation for successful legal transactions. Security systems protect the collaboration system and help minimize the risk of breaches.
8. Remote Access Control
Many VDRs have information rights management (IRM) technology, which allows administrators to control access to documents shared with third parties. IRM is a document encryption feature that only allows people with current rights to access documents. Data room administrators can revoke a person’s access to all documents remotely, even the ones downloaded.
9. Monitoring and Reporting
VDRs maintain detailed audit trails of every action taken within the platform. The audit logs let you see the time a user logged into the platform, the documents they accessed, and any changes made to documents. In the event of a security breach, administrators can create a usage report, which serves as a forensic tool. This report allows administrators to trace the origin of suspicious activities within the data room.
Get the Best Deal Room Security
When acquiring a deal room, it is necessary to evaluate the security features offered by the provider to see if they fit your business needs. Legal professionals can protect sensitive documents by acquiring deal rooms with advanced security features and authorized access controls. Adopting data security best practices like regular usage monitoring and reporting, security access, and watermarking enhances document security during transactions.