Secure data exchange: Virtual data rooms protect trade secrets
A development engineer sharing design drawings with his supplier in Asia. A lawyer sending contractual documents to her clients. A research team coordinating study findings with partners abroad. Business as usual at German companies, every day. Yet all too often, these confidential documents end up on unsuitable (read: insecure) platforms – or even as attachments to unencrypted e-mails.
People have become accustomed to this practice because it is fast and uncomplicated. The tools are familiar and easy to handle. Yet convenience has its price, tempting users of these services to ignore legal and security considerations. Worse, the consequences are very serious: Confidential design drawings, strategy papers and/or customer data spin out of control as soon as they are shared via such channels.
Cybersecurity: Consumer services liable to attack by hackers
Consumer file sharing services are primarily intended for private users. Their security architecture is not sufficient for the corporate sector, which is why cyber-criminals find numerous loopholes in them via which to attack.
For example, hackers penetrate accounts via compromised access data and then, undetected, copy or corrupt sensitive material and business-critical data. State actors too are active in this field, which is an attractive target given the few commonly used providers on the market. These players specifically spy on trade secrets in order to make them available to domestic corporations.
As soon as confidential design drawings or sensitive data fall into the wrong hands, the consequences for companies can be very expensive. Nor are financial issues the only consideration: If such an incident becomes public knowledge, the trust of partners and customers – painstakingly cultivated over many years – will suffer. One particularly critical bone of contention is that many cloud services do not even let customers see who has accessed what data and when. In the event of a serious breach, it is thus virtually impossible to reconstruct exactly what happened.
GDPR: Threat of fines or licenses being revoked for compliance violations
The General Data Protection Regulation (GDPR) obliges companies to store personal data securely – ideally at a location within the EU. However, many data exchange platforms store data on US or Asian servers, in flagrant violation of the GDPR provisions.
GDPR violations lead to fines of up to 20 million euros or four percent of annual turnover. Regulated industries and professions (such as banks, doctors and lawyers) also risk losing their license to operate. Additionally, insurers often refuse to cover damages in cases where data protection laws have been violated. In such cases, companies not only have to cover the costs themselves: They also risk losing their customers’ trust – a danger that could be avoided with genuinely secure data exchange.
Missing audit trails: Blind spots in connection with document access and use
Do you know exactly who has accessed or edited your files at any given time? If you work with conventional cloud services, your answer will probably be a shake of the head. This lack of transparency makes it impossible to detect and assess security incidents, and more difficult to comply with prescribed retention periods. Also, it is impossible to detect unauthorized accesses in good time.
B2B solutions: Virtual data rooms enable secure data exchange
A trusted virtual data room solves all these problems because it is specially tailored to the requirements of corporate customers. It combines secure data storage with precise access control and seamless, no-gaps documentation of every activity. The result? You retain full control of your data at all times.
In theory, companies can assemble this kind of platform for secure data exchange themselves. It is a lot of work, though: Suitable servers must be sourced, a security architecture built, encryption implemented, access rights established and audit functions developed. And then there is the challenge of running the system, complete with updates, patches and security checks. The resources required for this effort are, of course, then not available for your core business.
Specialized providers such as netfiles take all this work off your hands. netfiles Data Room gives you an SaaS solution that is ready to run immediately and that possesses multiple certifications – including ISO/IEC 27001, SOC 2 and the C5 seal awarded by Germany’s Federal Office for Information Security (BSI). Data rooms from netfiles meet all the requirements of the GDPR and satisfy the strictest security standards. At the same time, you benefit from intuitive use that makes secure data exchange as easy as working in the cloud – the only difference being a legally secure and compliant foundation.
Granular rights let you define who can see, edit and/or download what documents. Automatic versioning prevents the loss of any data, while secure audit trails reliably document every access. Crucially, choosing netfiles also marks an important step toward digital sovereignty: Your confidential data is safely protected from the influence of and access by foreign government agencies or jurisdictions, such as the US Cloud Act. Why? Because netfiles is a purely German provider who stores your data in encrypted form at certified, highly secure data centers in Germany.
Secure project management: How data rooms make teamwork easier
Sabine Meyer, project manager at an industrial company, is collaborating with three external partners on a development project. In her virtual data room, she is setting up a new team, e-mailing colleagues and external partners inviting them to join, and thus enabling shared access – quickly, securely and transparently.
Upload function: She simply drags and drops project documentation – as individual files or whole folder structures – into the virtual data room. For each folder, she can define who is authorized to read, edit and/or download its contents.
Notifications: Sabine is automatically notified by e-mail whenever one of the partners uploads new data. She can then open the file in the browser, check it and make any necessary adjustments, even when she is on the move. A colleague at Quality Assurance might be working on the same file at the same time, but both see each other’s changes in real time.
Access control: Before new uploads are officially released, Sabine checks which team members have already seen them. The audit log shows her exactly who has done what and when. Since two external partners have not yet opened the specification, she sends them a reminder straight from the data room. This way, the whole team stays in sync before the project moves on to the next phase.
Convenience: Everything works in a familiar and intuitive way but with a far superior standard of security. Thanks to the virtual data room, Sabine can combine ease of use with secure data exchange.
Migration: Successfully transitioning to a virtual data room
If you have so far been using popular American cloud services, migrating to a professional data room will be easier than you think. Existing folder structures can be uploaded quickly and conveniently, and all users can be created at once simply by importing an Excel spreadsheet. As a rule, users can start working efficiently with the netfiles data room immediately, with no need for training or prior instruction.
During the onboarding process, our support team is always there to help. That keeps you working productively while also ensuring that your data exchange is permanently protected and legally compliant.
Bottom line: Secure data exchange – with no compromises
Virtual data rooms eliminate the trade-off between convenience and security: Files can be shared and team members can work in parallel on documents without confidential data seeping out uncontrolled into the ether. Each and every access can be traced, so sensitive information enjoys the best possible protection. Companies fulfil their obligations pursuant to the GDPR and can rest assured that their intellectual property is safely guarded against industrial espionage. They also avoid the threat of costly fines. In other words, legal certainty and data protection go hand in hand – simply, efficiently and sustainably.
👉 Checklist: Is your data exchange secure and legally compliant?
1. Data protection and legal compliance
Does your company have an order processing contract with the provider?
Does the solution satisfy the requirement for mandatory record keeping? For example, can you identify who accessed what data when?
Does the provider possess certifications such as ISO 27001, BSI C5 and SOC 2 to support compliance requirements?
Redaction function: Can sensitive document content be rendered illegible in the data room in order to fully comply with data protection legislation?
Is the provider bound solely by German/European law?
2. Access control and authorization management
Does the vendor have a role-based system of access rights (e.g. read only, edit, upload)?
Does the solution support two-factor authentication or passkey login?
Document protection: Can documents be given added protection in the form of watermarks or be made available only as PDF files (not as original files)?
3. Encryption and data integrity
Is your data encrypted during both transmission and storage?
Does your system record file versions and changes (to ensure a secure audit trail)?
4. Transparency and audit-proof capabilities
Do you have an audit log detailing all activities in the data room?
Can such logs be exported or used for internal compliance audits?
Does the system keep an audit-proof record of all accesses, downloads and changes?
5. Availability and operational reliability
Is guaranteed service level availability (SLA) specified (e.g. 99.9%)?
Are backup and recovery mechanisms in place in the event of a disaster?
Does the provider store your data exclusively in Germany/the EU?
Does the provider have a verifiably secure infrastructure (e.g. data centers with ISO-27001 certification)?
➤ A netfiles data room puts you on the safe side, as it completely fulfils all the above requirements.
➤ Go here to learn more about netfiles Data Room, or feel free to contact our sales team if you have any questions. We would be happy to help you!