The Due diligence concept appears in the context of business security. In this article, we will analyze the way Data Room providers support the due diligence policy in due diligence.
Virtual Data Room: how to provide the privacy of user data in due diligence?
Due Diligence is a process of forming an objective view of an investee, which includes investment risks, an independent assessment of the investee, and many other factors.First of all, the procedure aims to comprehensively verify the legality and commercial attractiveness of the planned agreement or investment project.
However, the completeness of the information provided in this type of inspection also plays an important role, which allows investors or business partners to more deeply assess all the advantages and disadvantages of cooperation. Thus, it is important to provide a secure working environment for documents exchange and storing sensitive data. In this case, Virtual Data Room is the best choice.
The essence of information security can be defined as the state of the information environment, which meets the needs of the subjects of information relations, information security, and protection of subjects from negative information influence.
The basic principles of information security are:
- Availability of information resources is an opportunity to receive the necessary information service, which is freely available, in a reasonable time.
- Integrity is the property of information to remain unchanged, in its original form, structure, during its storage or multiple transmission. Only the user who has access rights has the right to change, delete, make adjustments.
- Confidentiality is defined as a property of information that is that it cannot be made available to users and/or processes that do not have the appropriate authority to do so.
General principles of confidentiality and protection of personal data in the Data Room
Confidential information is present in all corporate information systems, and when using cloud-based Data Rooms, the company that provides cloud services becomes the administrator of the personal database.
The fundamentals of confidentiality, integrity, and availability of information are the main basis for determining data privacy elements in the Data Room. The confidentiality of personal information is ensured by providing access or the ability to collect and process such information only to those persons who have obtained the appropriate consent of its owner. Thus, due diligence for data rooms should implement a strict delineation of users’ access to various documents depending on the competence, position held, and their powers. In addition, Electronic Data Room must be tuned to the existing organizational and staffing structure and record-keeping system of the enterprise, as well as integrated with corporate systems.
If you need to access the Data Room or find out any information, you will need to provide one or more identifiers. Based on this, we can say that identification is a process that allows one to uniquely identify (recognize) a subject or object, by its identifier, in a particular system.
In order to prevent unauthorized access to the system and data, identification alone is not enough, therefore, authentication is used, and recently, the issue of two-factor authentication is becoming more and more relevant. The use of this or that characteristic in the system depends on the required reliability, security, and cost of implementation.
These points are very important for an effective inspection, their observance will help to get a really objective view of the planned agreement.