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In contrast to file sharing and storage solutions such as Dropbox, which only encrypt your files during the uploading process, secure data rooms encrypt every document as it moves between servers as well as in storage. This is essential to stop hackers from gaining access to the data if it is lost.
However it is vital to keep in mind that data rooms are only as secure as the security measures implemented by the server hosting them. So, while encryption of data at rest is crucial, it’s not enough to guarantee complete security. It is also worth determining whether the data room’s security system encrypts temporary files created when documents are downloaded to the browser. If not, that could mean that thousands of documents are left unprotected by a server that could be easily attacked.
A key feature is that you can add notes to documents that are only accessible by the person who created them. This reduces the likelihood of third parties gaining access to confidential information and facilitates collaboration during due diligence. In addition, the most secure data rooms have dynamic watermarks that update in real time, which prevents unsolicited sharing of files and can help to identify the source of a file if a leak does occur.
Make sure that the data room you’re considering is in compliance with industry standards for security by determining if it holds ISO 27001 or similar certification. Choose a data room with strong encryption and specific reports on activity and access.