What is a Data Room?

A data room is a digital storage solution that allows documents to be kept in a secure environment. It also comes with a variety of features that help with due diligence. These features include annotation tools, granular permissions, activity tracking and watermarking.

Data rooms are frequently used to provide security documents to clients (SOC 2 documents or compliance certifications) to help with due diligence. This is a great way to speed up the process and decrease risk by sharing this information with other parties prior to the close of the deal.

Traditionally, businesses have used email to share SOC 2 docs and other documentation. While this works it is inefficient and causes problems with controlling versions. It is also insecure due to the increased number of emails that are a result of compromised mailboxes, stolen credentials and phishing exploits.

Many secure file-sharing and storage options such as Box or Dropbox allow access to documents from any device and at any location. While they provide a good level of security most businesses or individuals require more than this. Documents that are sensitive and are used for fundraising, due diligence or negotiating deals must be stored in software that has greater levels of security.

The most important question to inquire about a “secure data room” is whether it restricts authorized users from sharing data with non-authorized users. Unfortunately the answer to this is almost always no. Most’secure data rooms’ do not restrict the number of times the same user credentials may be used to login to the system. Users can easily reuse login credentials on their own devices, or copy and paste a link into the browser of a friend’s computer.

mobile security scanner