Major businesses and financial institutions are turning to virtual data rooms (VDRs) to transform their financial workflows into streamlined systems with next-gen cyber security protocols.
This article deeply delves into this all-new concept of cybersecurity integration; exploring what VDRs are, and why they’re a game-changer for financial workflows. Let’s get into it.
The Basics — What Are Virtual Data Rooms?
Information, as precious as it is, is only useful if it’s shared yet secured. Due to the paradoxical nature of these requisites, this has been tricky to achieve online. But, virtual data rooms are a step in the right direction.
You can think of VDRs as online information repositories that can be used by entities to securely share documents with sensitive data. They were at first designed to primarily help with mergers and acquisition transactions (M&As), where the data shared is highly confidential, potentially containing valuable trade secrets. With compromised security, these deals could fail before they even begin. VDRs, with their modern security characteristics like access controls, encryption, and audit trails, became a popular platform for dealing with sensitive info.
Now, VDRs have become much more common. You can even use Google Drive as a virtual data room; uploading files and only providing access to select individuals through a shareable link.
Advanced Cybersecurity Measures
Virtual data rooms feature some of the latest and greatest cybersecurity solutions known to us, which is the primary reason behind such widespread adoption among financial institutions. File-sharing channels of old (like FTP or email) did not offer any real protection in the form of end-to-end encryption as VDRs do.
These rooms even allow administrators to put granular controls in place to limit access. This means access to especially sensitive pieces of information can be restricted to personnel with a higher level of authorization. These in-depth access controls are the need of the hour to manage insider threats and prevent data breaches.
Paired with a simple one-touch tool like a VPN (virtual private network), it becomes a nightmare for hackers. That’s because while VDRs act as a secure place to share and store important docs, VPNs can encrypt the tunnels through which all of this data passes during transmission. Together, a VPN and VDR offer an all-encompassing cybersecurity solution to facilitate collaborative projects. They protect the data both at rest and in transit, making sure it doesn’t land in the hands of malicious cybercriminals.
As an added benefit, virtual data rooms can even do wonders in creating and maintaining audit trail data. Since the activity of each user inside the platform can be tracked, the entity’s accountancy department can find information that can be useful for compliance purposes.
Streamlined Workflows
Bolstering cybersecurity is the primary utility of a virtual data room, but it’s not the only one. VDRs can benefit an entity’s financial workflows in many more ways, such as by streamlining them through the centralization of information. With a safe repository to keep and transmit data, employees no longer need to run through tens of physical files to access and share the required information. Instead, users can simply upload, organize, find, and share all their documents through these VDR platforms.
All these efficiency gains translate into not only time-saving but also improved collaboration, heightened team morale, and increased overall productivity. Another key benefit is that the geographical location of entity branches or employees is no longer relevant when it comes to accessing or sharing information since all of it is remotely accessible on a secure cloud.
Seamless Integrations with Existing Systems
While it may sound like a groundbreaking new piece of tech that calls for the total remodeling of an entity’s digital infrastructure, that’s not the case. Virtual data rooms can be integrated seamlessly into ongoing workflows and systems. Thanks to the Application Programming Interfaces (APIs) that many VDRs provide, companies can conveniently integrate them with popular apps and tools used for project management, accounting, or customer relationship management (CRM).
This allows for a smooth transition into a much more secure and efficient system, without having to manually enter data into a separate platform. With some VDRs, users can even use their existing login details to access the platform through its single sign-on (SSO) capabilities. This makes the login process way simpler for users and also emboldens online security through centralized user authentication.
With a VDR integration being so seamless, financial institutions can reap the countless benefits of secure information management without disrupting current systems and workflow.
Conclusion
Cybercriminals pose a constant and dangerous threat to corporations big and small, with the finance sector being particularly vulnerable. Attackers are on the rise to find, exploit, and leverage weaknesses in their processes of handling data. Due to the scale and extent of the information at hand, these risks are unaffordable.
Integrated cybersecurity solutions like virtual data rooms (VDRs) are hence essential to safeguard information and share it securely. VDRs act as platforms that not only optimize security, but also streamline an entity’s workflows, enhancing efficiency, offering audit trail capabilities, and much more.
