Inside the Vault: Advanced Security Features of Virtual Data Rooms

Cyberattacks that exploit system vulnerabilities to gain initial access increased 34% in 2025 compared to the previous year. This makes businesses conducting corporate transactions, such as mergers and acquisitions (M&A), increasingly use virtual data rooms (VDRs), workspaces tailored to secure document sharing. With so many data room platforms to choose from, knowing which VDR features provide maximum security is a must-have. This time, we dive deeply into safeguards that define enterprise-level data rooms.

Table of Contents

Multi-Layered Data Encryption

A reliable virtual data room typically applies the following encryption mechanisms for stored and transmitted data:

AES 256-Bit Encryption for Data Storage: AES stands for Advanced Encryption Standard and is impossible to break with the world’s most powerful supercomputers.
TLS encryption for Data Transmission: Transport Layer Security protocols ensure that transmitted data is encrypted similarly to stored data, ensuring multi-layered protection.

SSO Integration

Single sign-on (SSO) allows users to log into multiple software accounts using a set of credentials. This security feature drastically reduces the chances of a data breach driven by password fatigue.

“78% of people use the same password across multiple accounts.” Security Magazine

Advanced data rooms support the following SSO integrations:

Okta
Active Directory Federation Services (AD FS)
OneLogin
Ping Identity
Entra ID
Google Workspace

SSO integrations are typically available in enterprise-level data room pricing plans targeted at large teams. Configuration usually needs assistance from virtual data room providers.

Granular Access Controls

Granular access controls allow virtual data room administrators to selectively block access to stored contents and control user actions, such as printing, saving, editing, and downloading. Leading online data room providers employ flexible access controls that balance protection and collaboration. Here is an example of the professional implementation of access controls:

No access
Blocked view
View
Encrypted download
Watermarked PDF download
Original download
Upload
Manage (move, delete, copy, redact)

Information Rights Management (IRM)

Information rights management (IRM) allows dataroom customers to retain the ability to control access permissions of downloaded files. Administrators can revoke access to such files at any moment by changing the level of access, say, from Encrypted Download to No Access. Additionally, IRM-encrypted files require authentication and disallow saving changes, printing, and screen capturing.

This feature allows businesses to control sensitive data at all stages of business transactions and prevent unsolicited distribution. IRM also ensures the privacy of sensitive corporate information when employees leave the company or partnership contracts end.

Document Redaction

Document redaction is the process of removing sensitive information from corporate documents shared during VDR due diligence. Using a powerful redaction engine drastically improves the outcomes for M&A sellers, allowing for a fast and efficient preparation for document exchange with buyers. Here are advanced redaction features to look for in data room providers:

AI-powered Pattern Recognition: Modern data rooms implement artificial intelligence (AI) algorithms to detect and automatically redact sensitive information.
Multiple Sets of Sensitive Information: AI redaction typically detects personal names, addresses, emails, phone numbers, date & time, passport details, and payment details, such as IBAN.
Bulk Redactions: Redactions can be applied to categories, such as phone numbers or email addresses.
Audit Logs: All redaction-related actions are typically recorded in an activity log for compliance.

IP and Domain Restrictions

Top-tier data rooms implement additional access safeguards such as domain and IP address restrictions. This feature prevents access from unauthorized locations, organizations, or devices:

IP Address Restrictions: This limits data room access to whitelisted IP addresses, such as office networks, corporate devices, or partnership networks.
Domain Restrictions: This limits data room access to approved email domains, for example, corporate emails.

These features protect the data room environment from phishing attacks that have managed to steal email credentials. For example, if a user fails their credentials through a fake data room login page, the data room blocks the attacker’s IP address, preventing the intrusion attempt. This functionality is typically available under premium data room price tiers, tailored to businesses seeking advanced protection.

Audit Trails

Audit trails are detailed records of all activity in the data room, ensuring the transparency required for audit reviews. The following activity is typically captured in professional data rooms:

User Activity: Logins, document views, uploads, downloads, and other actions (up to 60–70 trackers in total). These comprehensive logs provide a complete timeline of user behavior within the data room environment.
Permission Logs: Detailed records of permissions assigned to user groups, folders, and files, with time stamps and access levels. This granular tracking ensures accountability and helps identify any unauthorized permission changes.
Document Activity: Detailed records of interaction with specific data room projects, including document engagement. These logs help measure interest levels and identify which documents receive the most attention from stakeholders.
Engagement: Engagement records typically track how data room users interact with files and folders, such as document views, downloads, and prints. This data provides valuable insights into user preferences and can inform strategic decisions during negotiations.

Audit trails enable companies to maintain the utmost transparency during business transactions and demonstrate compliance with regulatory standards.

Security Compliance Certification

Pro-tier virtual data rooms demonstrate strong data security compliance, critical for serving various industries and applications:

ISO 27001 (International Organization for Standardization): Validates the professional implementation of granular access controls and data encryption mechanisms
GDPR (European General Data Protection Regulation): Confirms the ability to operate in the European compliance environment, which is critical for businesses handling data of European customers
HIPAA (American Health Insurance Portability and Accountability Act): Confirms the ability to protect patient information from unauthorized disclosures
PCI DSS (Payment Card Industry Data Security Standard): Certified to handle payment data, such as cardholder data.

The Bottom Line

Multi-layered AES 256-bit encryption, SSO integration, multiple levels of access control, IRM security, document redaction, IP address, and domain restrictions define the best virtual data room for sensitive data. Paired with comprehensive audit trails and security certifications, these safeguards help businesses close M&A deals with confidence.