Security of data room software includes multiple layers of protection that secure sharing, storage and collaboration with sensitive data. It comes with access controls to limit who can view edit, download, and view documents, as well as audit trails that document user activity. It also comes with a variety of encryption options to secure data both at rest and during transit. Other features, like watermarks, help prevent sharing without authorization by displaying an unchangeable unique identifier on every file. It also supports two-factor authentication that requires another verification method to allow users to log-in and reduces the threat of malware. It also supports secure sheet viewing to protect formulas and PII in Excel files.

Many industries are subject to federal, state and international laws and regulations. This includes the California Consumer Privacy act (CCPA), GDPR and HIPAA. Other regulations include SOC 1 and 2 and ISO 27001. Data breaches can trigger legal penalties, fines and lawsuits, as well as reputational damage. They may also result in interruptions in operations and financial loss. Data room security can help ensure compliance with these regulations and laws by ensuring that only authorized users can access shared sensitive information. It also helps check this to prevent data leaks and other security risks by reducing the possibility that unauthorized users can gain access to sensitive information via hacking malware, phishing, and man-inthe-middle attacks. It also includes end-toend encryption that encrypts files on the device used by the sender and then decrypts them on the device of the recipient. This stops unauthorized data access, even if the file is accessed by someone else while being transmitted. It also comes with activity monitoring, which monitors user activity and records all changes made to the files and alerts administrators to suspicious behavior.