The Importance of Securing Your Data was written for Playlouder by a contributing author. Please note that contributing opinions are that of the author. They are not always in strict alignment with my own opinions. –Joe.
People mostly believe that only large organizations are supposed to protect business data, which is totally wrong. Small or medium-sized businesses are more prone to data theft because they are easy targets for hackers.
That's because small businesses usually don't pay much attention to data safety and end up paying a massive price in terms of financial losses and legal penalties.
So what to do about it? How to protect your business data in the most economical way? And why is business data protection vital for any business size?
One of the best ways to ensure business data protection is using virtual data rooms. Using data room services not only protects your business data but also makes data sharing easier and safer. Due to their high-end security features, large-sized businesses use the data room for due diligence during mergers, acquisitions, joint ventures, etc., while small- to medium-sized find it suitable for general data management processes.
Read on to know the importance of data safety and how a virtual data room can help you protect it.
Why is business data protection important?
Before talking about the consequences of data breaches or thefts, it is important to know that business data is generally of two types:
- Customers/clients’ data that may include residential addresses, phone numbers, email addresses, names, and bank or credit card details.
- Business’s operational data such as financial statements, tax records, licenses, agreements, contracts, trade secrets, employees’ records, etc.
Here is what happens when a business suffers from data breaches.
1. Legal actions
Every organization or company (B2B or B2C) has a clientele and possesses important personal details (mentioned above). In case of a data breach, the company will face legal action, and a settlement may cost millions. Every business is legally required to implement standard/recognized data security measures to protect customers' and employees' data.
2. Financial losses
Companies failing to protect their data may also suffer financial losses. According to a study, the average cost of data breaches was almost $4.24 million in 2021.
Similarly, this cost increased to $4.96 million for businesses that hired independent or remote workers. After a data breach, companies had to pay for different expenses, including:
- Legal fees
- Buying/purchasing new data security systems
- Compensation for the customers affected by the breaches
- Expenses for conducting a full investigation of the breach
3. Loss of credibility
Credibility loss is probably the biggest negative outcome of a data breach, even if it hasn't affected the customers directly. A data breach of any type will make customers think that their credentials and personal information are not in safe hands. The loss of customers is the biggest loss for a company.
How can online data room software help protect your business data?
An electronic data room is a highly secure data repository with a bank-grade security system. Here is why data room software should be your top choice for data protection.
Highly secure data storage
A virtual data room has multiple layers of security that not only keep the hackers away from your data but help you catch internal culprits.
The protection starts a two-step verification process in which any user can log in after giving the correct password and a secret code delivered to their mobile phones or emails.
Apart from that, you can store a document in encrypted form. That said, even if the intruder gets in by any chance, the data won't be retrievable.
Similarly, data room administrators can activate “view only” or “fence view mode” on documents to prevent users from downloading, editing, or copying them. In fact, they cannot take screenshots or photos of these documents.
Safe data sharing
Apart from data storage, data sharing is another critical issue because this is where the data scams or thefts become easier. Professionals usually share data via emails which are prone to phishing attacks. In fact, email service providers like Yahoo have suffered from data breaches in the past.
Virtual data room software allows you to share documents within the data room in a controlled environment. You can add users temporarily for data sharing purposes and set access rights accordingly. Similarly, the VDR administration is allowed to revoke access to a document anytime.
If a data room user loses their mobiles or devices logged into the data room, the administration can immediately remove those devices from the VDR (and purge all the VDR documents from the device).
Top 5 virtual data room providers
Although VDRs are high-end business software, that doesn’t mean they would be expensive too. Data room vendors have flexible pricing plans for all types of businesses according to their needs. Here are some of the best data room providers:
- iDeals Solutions
Summing it up
Business data protection is important for multiple reasons, such as avoiding financial losses, legal penalties, and credibility loss. Most importantly, it is no longer an option – using standard data security solutions such as virtual data rooms is mandatory. Data room software provides maximum protection during data storage and sharing.
To find an optimal online data room software, review and compare virtual data rooms. An independent data room comparison will give you a bird-eye view of the market and its strongest players, with pros and cons of each taken into account. This way, you’ll be able to choose the best VDR solution for your specific needs, and therefore increase the security of your business data.