There is a common misconception that data security only applies to enterprises or large-scale businesses, as they possess large amounts of valuable information.
However, in reality, it is quite the opposite. Hackers or cyber criminals often prefer small or medium-sized businesses as they are easy targets. Enterprises usually have strong data protection measures, while SMEs are vulnerable due to a lack of resources. But what's even more interesting, about 59% of companies don't know whether their security defenses are enough to stop cybercriminals.
Does that mean SMEs can't do
anything about cyber threats? No, thanks to data room virtual software,
businesses of any type or size can now employ the best and the latest cyber
protection measures.
Why is data protection important for businesses?
The first question you may ask is why is data protection vital for SMEs. Why would hackers bother spending time stealing data from them?
The answer is simple.
Businesses, no matter their size, hold lots of sensitive information which may
include customer data, patents, trademarks, product prototypes, secret
formulas, etc. This type of information needs the highest form of security, and
that is what virtual data rooms provide. Here are some other reasons that make
data protection necessary.
Financial losses
Financial setbacks are a major negative outcome of data breaches or losses. According to Statista, the average cost of a data breach in the financial sector in the United States was $5.97 million. Similarly, the global average cost of a data breach was $4.35 million in 2022.
The cost of the breach usually
consists of the amount paid to affected customers, legal fees, remuneration for
data breach inquiry, and purchasing new security mechanisms. Businesses may
have to pay additional regulatory penalties as well, which is disastrous for
SMEs.
Lack of credibility
It takes a lot of time and never-ending
efforts to build trust among customers — startups and SMEs can relate to it.
However, a data breach is a dent in the company's reputation, even if it
doesn't directly impact customers. A company planting its feet in the market
may never recover from the effects of data breaches in terms of credibility and
trust.
Legal action
Legal actions, or lawsuits, are another challenge that a company might have to face in case of a data breach. States and countries have regulatory authorities in place which require businesses to implement strict security measures to protect customer data and other valuable information.
Data breaches raise concerns
about the quality of protective measures applied by the company, thus resulting
in lawsuits.
Role of virtual data room services in secure data management and collaboration
A virtual data room is
essentially a secure, controlled, and certified online document repository
primarily used by businesses and dealmakers to share, store, and manage
information during third-party transactions and financial deals. Here is why
businesses should consider using a secure data room for data management and
digital collaboration.
Unbeatable data protection
Cyber Threats are a pinching headache for businesses, while data security is the biggest selling point for virtual data rooms — a ready-made solution. Virtual data rooms employ the latest security measures often used by banks and even military institutions.
For example, any high-end data
room allows you to encrypt data (through a 256-bit SSL data encryption) while
storing and sharing information. It is the latest data encryption in the
market.
What's more, VDRs prevent intruders through features like multi factor authorization, IP access restrictions, remote device purging, and device deletion. Some vendors like iDeals data room provider boast eight layers of access permissions to minimize the chances of data breaches to zero.
Better control over data
In addition to primary preventive measures, virtual data rooms give you more control through document protection features. These features make it easier for you to safely share data with third parties and company employees.
For example, if your company is involved in external dealing that requires due diligence, a virtual data room due diligence can help you:
● Define access levels for all the external users you are inviting to your data room
● Restrict users from downloading, saving, printing, editing, or even sharing certain documents
● Revoke document access whenever you want (the remote device purging feature will also remove any data downloaded by the user)
● Hide any segment, paragraph, or sentence from a
document with the help of the fence-mode view
Compliance management
Regulatory authorities regularly update/change the data protection requirements to keep up with the latest trends. That means businesses operating under those authorities need to upgrade their security systems accordingly.
All high-end virtual data room
services regularly update their products according to the changes made by
authorities, allowing businesses to concentrate on other important activities
rather than fretting about compliance issues. Common data room certifications
include ISO 27001, FINRA, FISMA, HIPAA, SOC Type 1/2/3, and GDPR.
Rounding it up
Data protection is equally important for startups, SMEs, and enterprises, and failing to do so may result in financial losses, legal penalties, and loss of trust and credibility. A digital data room assists businesses in securing their confidential data, simplifies the data sharing process, makes online collaboration safer and faster, and helps tackle compliance issues.
Choose a virtual data room for your needs by exploring the market and checking the real users' virtual data room reviews.
