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How Virtual Data Rooms Can Help With Compliance And Regulatory Requirements

As data security threats grow on a global scale, local and international regulatory authorities are developing more and more strict protective measures for data management practices in the business world. Regulatory authorities pay more attention to customers’ personal data and financial information.

Therefore, businesses operating under a specific authority are bound to comply with relevant requirements. One way to do it is to develop data management systems that are compliant with regulations. The other option is to subscribe to compliant, ready-to-use data management platforms like virtual data rooms.

Dataroom software and modern-day businesses

Virtual data rooms or commonly known as digital data room software, are cloud-based data management solutions that nonprofits, government institutions, professionals, and businesses of all types use for data storage, management, sharing, distribution, etc.

Modern-day virtual data rooms have turned data rooms into mega business solutions that can cater to other business needs, such as project management, meeting management, and online communication management.

Initially, virtual data rooms were used for M&As, but as the technology evolved, businesses started employing VDRs in other fields. Today, there are dedicated data room services for M&As, fundraising, initial public offerings, real estate management, litigation, risk management, biotech licensing, and due diligence.

Important virtual data room security highlights

Virtual data room companies have already changed the perspectives about data protection. This is probably why Angleo Dean, CEO of, believes that “Technology will play a crucial role in data management practices, replacing traditional storage practices in the near future. Technology empowers companies with tools needed to ensure better cybersecurity, practice more efficient governance, and gain a competitive edge.

It is beyond doubt that data room technology has just set new standards for cybersecurity firms to follow. It is almost next to impossible to breach a certified data room software unless there is a human error.

Following are some of the best security features you can find in data rooms.

  • 256-bit SSL data encryption allows users to store and share data in encrypted form, which means the unauthorized users won’t be able to read files even if it breaches the initial security layers. Such a strong data encryption feature is used by banks and the military.

  • The remote device purging feature gives the VDR the right to delete/remove any suspicious device (and the VDR documents in it) from the platform.

  • Fence-view and view-only mode prevents users from sharing, editing, annotating, deleting, printing, or saving a file.

Other highly useful security features include multi-factor authorization, digital watermarks, file tracker, document shredding, etc.

How virtual data room software can help with compliance?

Data room software is not just a simple data storage tool like the free ones on the internet. These repositories are managed and hosted by certified virtual data room companies. Here are a few examples of how data rooms help with compliance requirements.

International organization for standardization (ISO compliance)

ISO is a globally recognized regulatory authority that standardizes different processes in businesses, including data management practices. There are almost a dozen ISO standards for data protection that fall under the ISO-27000 family.

However, ISO 27001 is known to be the best standard for information security and data management in the world. Data rooms are usually ISO-27001 certified allowing their users to comply with ISO requirements with ease.

Apart from that, digital data rooms are also ISO-27081 certified, which is a premium ISO standard for cloud storage.

FINRA compliance

FINRA, or Financial Industry Regulatory Authority, regulates the securities, brokerage firms, and other elements of the industry to protect investors in the US. It is the biggest independent body regulating all the security firms operating in the country.

Using FINRA-compliant data room software allows security firms and similar financial institutions to follow standards set by the regulatory authority.

HIPAA compliance

 Health Insurance Portability and Accountability Act, or HIPAA, is a federal law that regulates the usage and protection of sensitive customer data in the healthcare industry. Any healthcare institution, such as hospitals, pharmaceutical companies, and medical practitioners, is required to protect patient data at all costs.

Virtual data room vendors like iDeals that provide services in the life science industry are HIPAA compliant. That means businesses in healthcare can use these data rooms to take care of their regulatory requirements.

GDPR compliance

GRPR, or General Data Protection Regulation, regulates the data privacy and usage laws in the European Union and European Union Economic Area. It is a highly important regulatory authority recognized in the European Union. GDPR-compliant data rooms settle compliance issues for businesses operating under this authority.

SOC2 compliance

Although SOC2 is a voluntary compliance, it is still highly recognized in the United States. It deals with data management and privacy practices, such as data confidentiality, processing integrity, availability, and security. Using a SOC2-compliant VDR takes care of all the regulatory requirements set by the institution.

Final words

It is safe to say that data room software is one of the most reliable data management tools in the world right now. It not only protects highly sensitive information but is super helpful in managing compliance issues for businesses. 

Best of all, it complies with globally recognized standards in terms of data security and personal information management, such as HIPAA, GDPR, FINRA, ISO, and SOC.

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