1 March, 2023

Privacy and confidentiality are critical for the banking and finance communities. Customers and investors want the assurance that all their data, documents, and personal information are protected from prying eyes, shared only on a need-to-know basis.

Finance and banking professionals are well aware of the importance of confidentiality and its tenets are ingrained into the daily practices and culture of their businesses.

The Threat of Cybercrime

However, in today’s world, confidentiality faces new threats, particularly cybercrime. Security research firm Getastra reports that cybercrime accounted for $6 trillion in damages in 2022, a number they predict will grow by 15 percent a year starting in 2023.

The finance and banking industries are prime targets. Today’s hackers understand the patterns of relationships common to finance and investment deals and they have sophisticated AI-enhanced algorithms to seek out vulnerabilities - archives with unencrypted financial records, confidential documents shared in an unprotected online environment, data files shared by email or file-sharing apps. Once a hacker identifies a vulnerable document, malware is attached and the fun begins.

Virtual Data Room: A Protected Environment

Banks and investment firms can meet today’s security challenges by utilizing a virtual data room (VDR). Sometimes called a virtual deal room, a VDR is used as an ultra-secure online repository for financial records.

A VDR from a quality provider like ShareVault provides a full array of safeguards: all documents in the VDR are automatically encrypted, and access to documents is limited to an authorized list of users who gain access using a two-factor password. Even those who have access have defined permissions for use, such as save, print, copy, or view only, and expiration dates on access. Documents can be remotely “shredded”, even after they’ve already been downloaded.

ShareVault, a company with more than 15 years of experience in working with banks, investment and private equity firms, and other financial institutions, understands the pressure-cooker atmosphere in finance dealmaking, so they provide protections for every authorized user, allowing fully-encrypted document sharing from any browser or device, at any time, from anywhere, including those in remote locations. ShareVault protected access and document sharing can also be extended to analysts, accountants, the legal team, regulatory experts and other third parties.

ShareVault’s built-in software includes document management tools like drag-and-drop uploads, a powerful full-text search engine, inter-document hyperlinking, and easy integration with DocuSign and other file-sharing apps.

At the appropriate time, a bank or investment firm can invite investors into the protected ShareVault VDR. By following the same security protocols, these current and prospective customers can enjoy fully protected document sharing.

Mergers and Acquisitions (M&A)

Virtual deal rooms are typically used during M&A to securely store and share confidential information between the parties involved in the transaction. On one side, the onus is on the seller, who is responsible for a due diligence brief: all the pertinent financial records, legal documents, and contracts that support the seller’s valuation claim. With ShareVault's software, sellers can upload these documents in a secure and organized manner, and control who has access on a need-to-know basis. To speed the process, ShareVault includes a Due Diligence Checklist, a software module that creates the folders and sets up the user permissioning system.

From the buyer’s side, ShareVault’s software allows fast viewing of documents, including a search function that provides a “zoomable thumbnail” of a page that ensures the search was successful. A potential buyer can also admire the seller’s focus on confidentiality and secure document sharing, a harbinger of a smart prospect.

Fundraising and Private Equity Transactions

Private equity transactions often involve exchanging confidential financial and operational data between the investor and the target company. VDRs facilitate this exchange by providing a safe environment for the sharing and storage of information.

In fundraising, VDRs enable investors to conduct due diligence on potential investments, helping them make informed decisions. Within the confines of a virtual deal room, they can review hundreds or even thousands of documents, organized into folders by ShareVault software and featuring hierarchical tags that show when a document is relevant to more than one folder. ShareVault’s centralized platform and smart, user-friendly software streamlines the dealmaking process.

When a fundraising or private equity deal moves close to finalization, ShareVault’s VDR easily accommodates the negotiation period and execution of purchase contracts and shareholder agreements and any necessary regulatory review.

IPOs and Regulatory Compliance

IPOs involve a complex process of preparing and filing financial disclosures with regulatory authorities. A ShareVault VDR meets that challenge by offering a safe system for sharing confidential documents and financial information with regulators, auditors, and underwriters. Since all parties have access to the same information, the risk of misunderstandings and conflict is reduced.

A ShareVault VDR also helps banks and investment firms comply with regulatory requirements, such as KYC, AML, and GDPR, all of which require the secure handling of sensitive information.

Data rooms can help these organizations manage their compliance obligations by being a safe place for sharing and storing private data with regulators and other stakeholders. By providing a verified platform for confidential documents, banks and financial institutions are aware that their information is appropriately secured and regulated.

Enhanced Security and Tracking

A ShareVault VDR provides a higher level of security and confidentiality than was available in the past, including advanced encryption techniques to protect data in transit and at rest, and provide features such as access controls and audit trails to monitor user activity. These features help to minimize the risk of data breaches and leaks.

Finance companies seeking to make good on their promise of security should use a virtual data room whenever possible. With automatic encryption of documents, authorization of users and their devices, and advanced security protocols for document sharing, a VDR is far more secure than email and file-sharing services like Google Docs, Microsoft SharePoint and OneDrive, DropBox, and Box.

The VDR administrator and the deal manager can keep an eye on user behavior to track down issues and assess development. ShareVault’s monitoring function works in real time to show who is reviewing documents, and for how long. For management or regulatory review, the administrator can provide a detailed record of usage for every document with a single mouse click.

ShareVault: The Best Virtual Deal Room Provider

A virtual deal room makes good on a bank’s or investment firm’s promise of privacy and confidentiality. ShareVault, with its long history in finance, provides the additional software tools and features to streamline even the most complex deals.

Contact ShareVault today to speak with a representative experienced in your field. He or she will provide a customized solution to your document security needs.

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