8 Good Reasons Virtual Data Rooms Matter for Big Data Protection (GDPR) in 2021

8 Good Reasons Virtual Data Rooms Matter for Big Data Protection (GDPR) in 2021

A virtual data room is used as online storage of a company’s important documents. The virtual data room is composed of a company’s contracts, employee information, intellectual property documents, financial statements, and the like.

It ensures well-managed company documents and thus gives the right people safe access to important files.

Because almost everything we do is already digitized, a company needs to have a new safe method in accessing files such as a virtual data room. This method ensures data protection and avoids serious damages that your computer’s system couldn’t prevent.

Here are good reasons why you need virtual data rooms for your company’s data protection.

1. Accountability

Investors dislike risks on their investment. With a virtual data room, all information is available in the data room for investors to see. Having all documents placed in an online warehouse and allowing investors to visit it reflects a good image of the company.

It makes them trustworthy as it only means that the company is not hiding anything from their investors.

Through this, investors can find comfort in knowing that the company is on top of things. A well-structured data room maintains a good relationship between the company and its investors.

2. Document preservation

Existing companies have a huge pile of records, and it keeps piling up over time. Aside from this, the paper also degrades with time and sorting those files by hand can take longer than tracking them down in your computer’s file system.

With a virtual data room, you can eliminate all the hassles and inconveniences that come with the traditional way of file keeping and sorting.

3. Keeps track of your company’s progress

Virtual data rooms are not only meant for file storage and distribution. They also come with versatile features that generate a better outcome.

Tracking and reporting are some of those notable features. These features are incredibly beneficial for online data room owners as they provide them with the ability to track the performance of all parties.

The data room can report the level of activity and the interests of all the parties involved. This information can help the company identify potential investors or partners in advance.

Moreover, through this, the company can better prepare for future negotiations to attract these potential investors.

4. Transparency for investors

Virtual data rooms don’t require online connectivity but to make communication more convenient, the idea can be tempting. The only downside is that it poses a security risk. This is why a client can be sceptical of online storage.

Fortunately, some types of software can deal with these threats. Furthermore, having an employee who understands how the data center works will maintain the security of the company. Aside from this, there are several other ways to ensure your data’s protection and security.

For example, you can limit who can access the virtual data room, put watermarks on every file, check all malicious software, make use of complex authorization, back up your data, and use an encryption file. These methods will prevent the illegal viewing and distribution of files.

5. Investors can have access to the documents wherever they are

One possible reason why many companies make use of data rooms because investors are well-updated with high-quality information. Data rooms make every transaction quick, easy, and painless.

Nowadays, most investors utilize it because it helps them with approving transactions and planning deals. It also gives investors the peace of mind knowing that they have updated even the slightest deletion, addition, change, and edit on every document. All parties who have access to the data room are being notified hence data leaks are certainly prevented.

6. Comfort

Virtual data room provides comfort and peace of mind to all parties in the company. The company does not need to inform all parties of the documents uploaded.

All parties are also not required to check from time to time to see what transactions are currently ongoing. A data room has a notification system for the investors and employees so that they can stay up-to-date with what’s happening.

7. Easy and fast transactions

The rule of thumb in business is to provide people with everything they want – and this is true with both customers and investors. Having an online data room leads to bigger bids that are often larger than those present in other channels.

Moreover, all parties can work on their respective tasks as quickly as possible. For those who are new to the concept of data rooms, one way to have better and faster transactions is by uploading data in bulk and with good speed. You also need to improve the system’s processes.

Another factor that can contribute to a faster transaction is the chance of eliminating actual or live meetings. Through the data room, one can just simply utilize the Q&A assistance which is more convenient and secure.

8. Saves money 

Both new and old companies find opportunities that can help reduce their company’s overall expenses and costs. With a virtual data room, a company can save expenses meant for a physical data room.

They can save all the costs used to power office machines and printing machines as well as the costs involved when purchasing file folders, staplers and clips, photocopy machines, and a lot more.

The office staff will no longer be stressed out and can devote their time to other things which are usually time meant for compiling, copying, and sorting documents. Think of it this way, reducing the expenses needed for a physical data room means an increase in the capital needed to further develop your business.


In this digital world, it is truly difficult to find a company that doesn’t have a virtual data room. However, while this technology is trustworthy, there can be downsides too. Nevertheless, virtual data rooms still offer more benefits than disadvantages, making them a worthwhile investment for any business.

Although it’s a fairly new technology, it’s an example of how technology constantly improves and any company that wishes to remain on top should consider going virtual.

I am a full-time professional blogger from India. I like reading various tech magazines and several other blogs on the internet.

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