A data room is an electronic storage system that lets documents be stored in a safe environment. It also provides a range of features that assist with due diligence. These tools include annotations, granular access permissions, watermarking and activity tracking.
Data rooms are typically used to share security documents with clients (SOC 2 documents or compliance certificates) in order to facilitate due diligence. Sharing the information with other parties prior to the deal is closed is a great strategy to speed up the due diligence process and decrease the risk.
Email has been used by companies to share SOC 2 documents as well as other documents. This is not just datazoning.net/6-important-points-for-virtual-data-room-reviews inefficient, but also leads to problems with revision control. It’s also unsecure, with cyber-attacks increasing, leading to compromised mailboxes, stolen credentials and hacking exploits.
Many secure storage and file sharing solutions such as Box or Dropbox provide access to documents on any device and at any location. They offer a high level of security, but the majority of people and businesses need more. Sensitive documents used to conduct due diligence, fundraising or negotiating deals must be stored and shared in software that has greater levels of security than the personal file-sharing software.
The most important question to ask in any secure data room’ is, does it restrict authorized users from sharing documents with non-authorized users? Unfortunately the answer to this is almost always no. The majority of secure data rooms don’t even limit how many times the same credentials can be used to access the system. It is simple for users to re-use logins from their own devices or simply copy and paste the link into the browser of a colleague’s computer.