Virtual Data Room Blog

Still Using FTP? 3 Reasons to Change to a Virtual Data Room

26-Mar-2017 09:00:00 / by Kamal Raj

If you’re still using FTP or other consumer storage and transfer solutions for your business requirements, here are 3 reasons to switch to an secure modern solution such as a virtual data room. Remember when you discovered FTP (file transfer protocol) and you thought it was so advanced to be able to upload your data to cyber space? In the good old days before online security became a critical issue, FTP was the answer to transferring information, particularly large files. The problem is, FTP is 40 years old now, and that’s ancient in terms of information technology. 

Reason #1: FTP is Not Secure

With security top of mind for company data, the old-fashioned FTP solution doesn’t adequately protect your confidential information. FTP was never designed to encrypt traffic, so it’s easy for hackers to sniff out interesting packets on the web, making them a primary target. Sensitive information is sometimes hidden “in plain sight,” stored in files with names such as:

  • Personnel Records
  • Passwords
  • Financial Details

Breaches in your security can be very expensive, if information such as your company banking details falls into the wrong hands – something that just can’t happen with a virtual data room.

FTP servers typically use hard-coded, reusable clear text passwords too, which puts your data at additional risk and creates enormous liability for your company. You’re relying on your employees to protect your information. Even if you trust them completely, mistakes happen. Besides, FTP offers no audit trail because usage isn’t always logged, and these days auditors frequently question the use of FTP servers in the protection of company data.

Reason #2: Consumer based options Don’t Cut It

Consumer options such as Google Drive, Dropbox, SkyDrive and entered the market in response to the growing need for cloud storage and bigger file transfer capabilities. While these are great facilities for sharing photos with family and friends, they simply aren’t as suitable for the storage of confidential data as a virtual data room is. For one thing, cloud synchronization services can render your company firewall useless, and in some cases actually deliver malware to your internal network. There are even tools that have been created specially for this purpose.

Although some storage options have introduced additional security measures such as Google’s Two-Step Verification, one of the main challenges remains the unsecured sharing that takes place. When you share folders with others, you’re effectively giving away unprotected access to your data storage. By combining business with pleasure, sharing folders and passwords, people sometimes forget what they have shared with whom.

Reason #3: VDRs Lower Your Risks

A virtual data room offers a secure, easy way to distribute confidential information. You not only get sophisticated data encryption, but you also have complete control over all your data at all times, through:

Granting user-specific access rights for viewing, editing, printing and downloading documentation based on seniority and authorization

Changing to a virtual data room enables your company to be in compliance with most legal requirements, even during a critical process such as a merger or acquisition. And for everyday purposes, it facilitates file sharing, business communications and makes convenience a cornerstone of your data usage. Don't wait until you become a victim to make the shift.  

                                   Virtual Data Room Whitepaper

Topics: M&A, Data Room, virtual data room, Data Security