Headlines have taught us that even the most financially secure companies cannot be free of security breaches. A recent study has shown a 73% year-over-year increase in ransomware attacks, and the average data breach cost reached $4.45 million.
In perspective, the costs associated with ransomware are expected to rise to more than $275 billion per year by 2031. One way to mitigate your exposure and avoid being part of this statistic is to implement a virtual data room (VDR).
Let’s discuss why more companies, both large and small, are transitioning to data rooms for secure file sharing and how this aligns with a smarter cyber resilience strategy.
Why standard cloud storage isn’t enough
Dropbox, Google Drive, and Microsoft OneDrive are examples of cloud solutions that meet basic internal collaboration needs. Nevertheless, they don’t provide the controls necessary to properly handle financial reports, legal releases, M&A publications, or board correspondence, particularly when the papers are opened up to third parties.
Further supporting this, IBM’s 2024 Threat Intelligence Index reports that cloud misconfigurations accounted for 26% of all recorded cyberattacks, more than any other root cause.
These platforms often fail to provide:
- Granular access control. Limited ability to assign document-level or time-restricted permissions.
- Visibility into activity. No clear tracking of who accessed which files or when.
- Protection against unauthorized distribution. Downloaded files can be copied or forwarded without traceability.
Let's go from the risks to the solution. Here's how companies make their corporate data safer and plan a long-term cyber resilience strategy.
What makes VDRs a smart security investment?
Unlike legacy systems that assume internal users are safe, most VDRs follow a zero-trust model. That means no one gets access without constant verification, even internal teams. This is important for data breach prevention because today, there is an increase in the number of insider threats and theft of credentials.
In addition, modern VDR software has a built-in real-time backup, file versioning, and ransomware defense so that you can secure clean copies in a few seconds.
Many cloud tools store your data across several locations with limited transparency.
However, your files will remain within the geo-fenced areas that are compliant with the General Data Protection Regulation (GDPR) or the Financial Market Supervisory Authority (FINMA) with VDR.
Some providers even offer on-premises options or sovereign cloud hosting if compliance is non-negotiable.
How to improve cyber resilience with VDR
You can’t predict a breach, but you can prepare for it. Some targeted improvements enabled by virtual data rooms can significantly reduce risk exposure while supporting business continuity.
These are six cloud security best practices your organization can implement using a virtual data room:
- Control information sharing
Limit access based on identity, device, and location. Enforce multi-factor authentication and require re-verification when users access sensitive content. - Restrict file access
Apply granular permissions to selected users or groups using VDR software. - Establish audit trails
Comply with an external audit or investigation by monitoring all activities on a document with time-stamped logs. - Strengthen protection against ransomware
Rely on systems with automatic versioning, watermarking, and access rollback. These features help limit damage in case of a breach and ensure fast recovery. - Integrate disaster recovery into operations
A secure data room enables fast access restoration, controlled document revocation, and region-specific data protection for minimal disruption during an incident. - Enforce secure file sharing across stakeholders
VDR platforms ensure secure data room access, even when collaborating with external stakeholders, by encrypting files with multi-factor authentication and applying usage controls.
When should a company start using a VDR?
VDRs are often misunderstood as being solely for mergers and acquisitions. However, they are utilized across various industries and functions.
Consider implementing a VDR if your organization:
- Shares confidential documents with external parties
- Manages legal, compliance, or regulatory workflows
- Prepares for audits, funding rounds, or strategic partnerships
- Operates in regulated markets such as finance, healthcare, or energy
- Needs to track and limit internal access to sensitive information
Choosing the right virtual data room providers requires identifying what kind of access, oversight, and compliance features your team needs.
What to prioritize when evaluating data room solutions
The level of security, usability, and transparency can vary in all datarooms. As you compare vendors, you want to seek capabilities that address your business data security risks.
Key capabilities to assess include:
- Granular access controls to tailor permissions by document or user role
- Built-in activity tracking with exportable audit logs
- Secure document viewing that doesn’t allow file downloads
- Customizable document expiry and auto-revoke settings
- Smart indexing and full-text search for efficient navigation
- Browser-based access with no need for third-party plug-ins
- Compliance with recognized frameworks such as GDPR, HIPAA, and ISO 27001
Conclusions
A strong cyber resilience strategy means preparing for worst-case scenarios before they happen. This process begins with securing your data processes. A virtual data room is essential for any company that values control, privacy, and peace of mind..