Data rooms are used to securely share confidential corporate documents during audits, acquisitions, financing rounds, and other financial events involving the exchange of sensitive documents. They are also used as the online document repository of choice for companies that recognize the risks involved in sharing and storing highly-sensitive company documents. Below are five ways to reduce risks with data rooms.
1. Ensure Business Continuity - What happens if a flood swamps your building or a fire wipes it out? Your company's documentation could be completely destroyed. Data rooms ensure that should a disaster strike, your documentation remains safe and sound.
2. Survive Server Downtime or a Network Outage - Storing data on company servers means that anytime the server goes down - whether due to maintenance, a computer virus, or even a hacker - so does access to your documentation. If this happens during an audit, merger negotiations, or some other critical meeting, the entire meeting will come to a standstill. By using a data room, you can access your critical documents despite the load on your server.
3. Minimize IP Leaks - Whether deliberate or unintentional, IP leaks can quickly derail deals. By using a data room solution with audit trails and automatic watermarking, you can tackle IP leaks head-on. Audit trails make it possible to determine exactly who accessed what and when while automatic watermarks reduce risk by reminding users that the documents they are viewing are confidential and not to be shared or distributed. However, some data room solution providers take watermarking even further by watermarking the user's name and email address prominently across the document. This provides a powerful incentive not to share as the user will know that the shared document can be traced back to him or her.
4. Prevent Unauthorized Access - Concerned about employees snooping around or stealing confidential information? Storing corporate documents, intellectual property, trade secrets, and financial information in a secure data room ensures that only those authorized to access that data can do so. Consider choosing a solution provider that uses two factor authentication which is even more secure. Two factor authentication ensures that only those who you have authorized will be able to access your data room. Two factor authentication is much more complex than password access (which can be compromised) because a second confirmation code is sent to the user's cellphone via SMS.
5. Ensure Compliance - As a high ranking executive, you are responsible for compliance. Audit logs can help reveal exactly who accessed a given document, when they did so, and what actions they took.
Ensuring business continuity, surviving local network outages, minimizingIP leaks, preventing unauthorized access, and ensuring compliance are just a few of the many ways that you can reduce business risk with data rooms.