Virtual data rooms are places that businesses can use to store and distribute confidential documents to selected third parties. This reduces the chance of sensitive business information being disclosed to unauthorized individuals. Traditionally, due diligence happened in physical rooms, however nowadays, it's conducted online in what is known as virtual data rooms (VDRs).

The top VDRs have security-first features that reduce the cost of data breaches and unauthorised sharing. These include granular access control multi-factor authentication, session timeouts. They also offer security restrictions on location and secure spreadsheet viewers as well watermarking and screen-blocking. All of these features combine to create a secure digital fortress that protects the information stored in the VDR and is shared with customers.

When choosing an encrypted data room it is important to be sure that the service is really suited for the task and does not just allow authorized users to log in and share your data on external platforms. Some "secure" solutions claim that they can block this. In reality they only decrypt files on the server and then transmit here them to the browser.

They depend on your browser having an SSL certificate and being set to only accept certificates from reliable sources. However, this doesn't mean that your VDR cannot be hacked. However it does guarantee that hackers are only able to access your encrypted files and not your temporary files.