Virtual Data Rooms. Main Trends in 2020

Data rooms have absolutely revolutionized the way companies go through all the document-related processes. This technology eliminated the need to travel and, therefore, spend money, time, and other resources. A virtual data room allows businesses to save their budgets and accelerate deals. Also, this tool helps see processes more clear, spot setbacks, and make better data-driven decisions.

So there is no surprise that the data room market was valued at $690.59 million in 2019. And specialists expect its value to grow up to $1607.41 million in 2025. Of course, this tendency becomes a motivation for entrepreneurs to create new data rooms to get a piece of revenue. And as the competition becomes more challenging, VDR providers come up with new ways to win the battle. So here are the main trends you will see in the data room market in 2020.

image trends for blog post

The combination of versatility and simplicity

Just a couple of years ago some providers considered their focus on Mergers and Acquisitions or any other business process or industry to be an advantage. They were creating an image of a team that’s dedicated to perfecting a tailored solution. Therefore, the users saw such a provider as an impeccable option for their specific needs.

However, today one company can go through different business processes that involve documents, and a solution that works only for one activity seems rather useless. Some providers like iDeals figured the need for a versatile data room right away and spent all this time perfecting their solution to make it suitable for every industry and all the needs companies might have.

The more requirements a data room has to fulfill, the more features it should have. Thus, versatility creates another challenge for providers – to pack all the tools into the interface while keeping it as simple as possible. This is a very complex task, but iDeals shows that it’s possible to execute it successfully. This data room provider offers all the features businesses might ever need, but its interface is still very easy to use.

Artificial intelligence

Sure, AI is still making its first steps. Yet, some data room providers already try to implement it in their solutions. For example, Ansarada uses artificial intelligence to automate the document management process and supply customers with useful insights into the activity of their partners in the data room. 

As AI evolves, and new technologies emerge to make it simpler to implement artificial intelligence in different services, we expect to see more data room providers taking advantage of it. AI can help users to find required files, for instance, or to get a better understanding of the activity of other participants of a business process. Also, providers can use machine learning to offer clients customized agile workflows.

Open-source solutions and compatibility

Modern businesses use plenty of different digital tools in their workflows. And in 2020 a data room should fit all these instruments seamlessly and gather them together in a single workspace. Quite a lot of data room providers do their best to make their solutions compatible with as many third-party tools as possible. Yet, it’s a challenging process, and, perhaps, it’s simpler to offer open-source data rooms. Then clients will have a chance to customize their workflows by making a VDR compatible with the instruments they use.

The evolution of technologies brings us many interesting and useful ideas on how to improve business processes. And in 2020 we can expect data room providers to come up with new approaches to their software. The competition on this market is very harsh, and vendors will try to get as many customers as possible by implementing fascinating solutions.

V-Rooms announces white label dataroom

easy access with virtual data room

V-Rooms private label

By offering a ‘private label’ or ‘white label’ version of their virtual dataroom, V-Rooms opens up its platform for investment banks, investors and other professionals to offer a secure file sharing platform in their own, branded style, name and logo. V-Rooms claims this will also make the platform more attractive as an investor platform, for instance for for private placements, or for clinical trials in the medical and pharmaceutical industries.

V-Rooms is a US-based virtual data room provider with competitive pricing. V-Rooms Virtual Deal Marketplace (VDM) integrated with WuFoo forms, and the company plans to add more integrations to automate workflow and processes.

Firmex adds a new feature to its virtual data room

secure data room

Firmex Versions

Versions is a new feature to the Firmex VDR that allows users easy access to the most recent version of a document, while keeping older versions as well.

We’re seeing innovation in the VDR industry by integrating workflow and collaboration features into the base secure document sharing platform. Some of the other dataroom providers have been adding similar features for managing multiple versions of the same document, and Firmex certainly tries to stay ahead of the curve in terms of features and usability.

“We’re very excited about this new feature,” said Firmex CEO Joel Lessem. “It will bring a new level of ease and organization to the deal making process, and help our customers succeed.”

Data security in focus for M&A data

Managing data with virtual data room

 

In December 2014, a major incident involving theft of M&A data saw an increased concern for data security in M&A. Dataroom providers and especially users should increase their awareness about data security.

On the 1st of December 2014, security company FireEye reported that a highly sophisticated group of hackers dubbed ‘Fin4’ has been stealing confidential M&A data from nearly 100 publicly traded companies or their advisory firms.

The news comes as a shock to the industry. While information leaks and insider trading have been around for a long lime, the elements of this attack are as yet unseen. Read the specifics below.

What happened?

Confidential information was stolen, specifically non-public information about merger and acquisition (M&A) deals and major market-moving announcements of publicly traded companies.

No details were released about the companies that were targeted. In the past however, attacks often targeted the healthcare and pharmaceutical industries where stock prices can make significant swings on news of mergers, clinical-trial results and regulatory decisions.

Why would hackers to want to access confidential M&A data?

Presumably the information was stolen for the purpose of insider trading, gaining an unfair advantage in the stock market by using non-public information.

This insider trading could have been done by the hacker group directly trading in the affected stocks, or perhaps by selling the information to others. It is unknown if professional investors or hedge funds might be involved.

However other motives are also possible, as this type of information can be valuable in various scenarios. A possibility is that the opposing sides of merger negotiations would want to gain insight in the other side’s strategy. Or similar, a bidder in an M&A auction wanting knowledge about competing bids. There is no way to tell at this stage.

Who is behind these attacks?

The unknown group of attackers dubbed ‘Fin4’ by researchers at FireEye are not your typical assailants. In the past, hacker attacks often originated in Asia or Eastern Europe, but not this time.

The hackers are native-English speaking, probably US-based or possibly Western European. The group has a clear background in the financial industry, probably from having worked (or still working??) on Wall Street. They show extensive industry knowledge and know the nuances of financial sector regulatory and compliance standards. In short, this is an attack by financial industry insiders.

Fin4 is believed to have started over a year ago, at least since mid-2013. So they would have had plenty of time to benefit from their illegal activities.

How did they steal the data?

Also different from previous hacking events, the attack was not so much technical but social in nature. Fin4 did not use malware to infect IT systems, but employed sophisticated social engineering tactics.

The group could send dangerous versions of legitimate corporate documents and used expert knowledge on product development, purchasing, M&A and legal issues to obtain user’s e-mail passwords. They focussed their attention specifically on the account details of individuals with insider knowledge on M&A deals, such as top executives, lawyers, consultants, bankers, advisors, etc.

What can you do to protect yourself?

Providers of virtual datarooms have made data security the core of their business model. But this attack shows that is pays to focus on the weakest link in the security chain: the end-user. We recommend end-users be especially mindful when handling confidential information and documents, as users are a key part in preventing both technical and social hacking. We therefore recommend to:

  • use strong passwords
  • use 2-factor authentication when available
  • beware of ‘phishing’ e-mails
  • never send confidential documents to (unknown) e-mail addresses
  • use a secure virtual data room to distribute confidential information

Meanwhile, the FBI and SEC are reviewing the FireEye report and will try to track down the hackers.

CapLinked adds document security to virtual dataroom

using virtual data room

CapLinked FileProtect

CapLinked launches a new security feature ‘FileProtect’ to its virtual dataroom which can revoke access to documents shared with outside parties, even after they have been downloaded.

The goal of the new FileProtect security feature is to extend document controls (Document Rights Management or DRM) beyond the boundaries of the virtual dataroom.

Within the secure environment of the virtual data room, user access is already limited and user rights can be assigned on specific documents or folders. these rights can include preventing the usert to open, copy, print or download a file. And when users do have these rights, they can be revoked at any time for instance when their involvement in a transaction ends.

However when users can download a document, in principle there are no limits to what they can do with it (technically). And despite legal protection, probably in the form of a confidentiality agreement, technical assurances are sometimes desired to control access even after the document has been downloaded. FileProtect enables just this, it is a way to revoke access and  block opening, copying, and printing of Microsoft Office and Adobe PDF files even after they have been downloaded. This can be when the transaction ends or when a pre-set deadline passes.

The best of all for us at Dataroom Review is that FileProtect works without plugins that have to be installed on the end-user computer. We’ve never been a fan of plugins as these are notoriously difficult to install in managed IT environments (such as those of law firms, accountants, banks and many consultancies). By adding post-download DRM to documents without requiring local plugins, CapLinked reaffirms its intention to innovate and offer plugin-free security, and earns our appreciation for doing so.

CapLinked’s FileProtect delivers powerful protection with ease-of-use. Security doesn’t have to come at the expense of the user experience.