Which criteria characterize virtual data rooms? What must security requirements be met? Can virtual data rooms also be used outside the EU? – These are frequent questions that reach the data room provider.
Many industries place their trust in data rooms. But public institutions and courts also use the platform to carry out their strictly confidential and often secret communication.
Password-Protected Access to Data Rooms
In the course of M&A processes, all necessary and confidential documents are made available digitally in a virtual data room. Bidders and interested parties can use password-protected web browsers such as Chrome, Edge, Firefox or Safari to find out about the property for sale or parts of it. Experts such as lawyers and business economists are often hired to view the data. The main advantage is that the documents can be viewed online – with no travel costs and no great effort to register on-site. VDRs are much better protected. For example, some documents may B. not be downloaded. Employees do not have access to all folders. In addition, the digital data room signs each document with a time stamp and the name of the user so that it is precisely recorded who has read which information. This screening process, known as “due diligence” in technical jargon, is accelerated by a full-text search. Thanks to intelligent search options, there is no need to “dig through” files.
Data Rooms for Secret and Audit-Proof Exchange of Documents
VDRs have revolutionized the M&A business because the data rooms can be used online from anywhere in the world. An internet connection and a standard browser are sufficient. No software installation is required, which in turn offers security plus since no external software has to be set up. Most use data rooms for due diligence processes. These include, above all, lawyers, tax consultants and auditors, M&A professionals and corporate finance consultants, investment companies & banks, and real estate companies/real estate/architecture/engineering offices. Others use the VDRs for secret and audit-proof document exchange. These are usually so-called professional secrets of all kinds, such as notaries, doctors, and courts. However, the secure provision of highly sensitive documents is also required in the areas of research & development, committee communication, project developers, and decentralized project teams.
GDPR and E-Privacy Compliant
Data rooms are subject to high-security requirements, must be GDPR-compliant, and meet the e-privacy standards of the European Union. A provision or backup of the data rooms outside the EU is, therefore, strictly prohibited. In addition, other security features guarantee a secure exchange of documents. The data room providers rely on this encrypted transmission of the documents according to the highest encryption protocols, multiple daily malware scans, reputation monitoring, regular vulnerability checks, and the provision of the server according to the high requirements of the seal. With the assignment of flexible reading rights, the data room solution offers a great advantage: Your customers only see the assigned files so that the confidentiality obligations for the respective addressee group are observed.