Virtual Data Room: Why Your Financial Institution Needs One
A virtual data room is a secure space on the internet where you can store and control information. Not everyone can access such data since it contains critical info concerning the company’s ownership. Most companies are opting to use VDR’s as opposed to physical data rooms because they are easy to access. More so, they offer a high level of privacy, which physical data rooms do not have.
When Can I Use a Data Room?
Banks and other financial institutions have to keep on changing as the market dictates.
For this reason, you find new products and mergers being fostered to cater to the needs of the dynamic market. During this time, the company heads and stakeholders have to do a lot of paperwork that facilitates the union. Some of the instances when data rooms come in handy include:
When creating new partnerships
The banking sector is one realm that keeps on changing drastically. As such, it is not uncommon to find banks merging with smaller financial institutions in a bid to get leverage to SME’s. Once the two companies roll out the partnership, they have to prove to one another that the people at the deal table are the rightful owners of the said companies. So, the stakeholders will create a new user-platform that allows the potential partners to access the data room and view the company documents.
During audits
Every so often, companies have to go through rigorous inspections. The procedure is meant to ensure that the bank complies with the tax man’s policies and that it offers high-quality services to its clients. The auditors can easily peruse through the information on a VDR and ascertain that the company complies with the set laws regarding tax remuneration.
What are the benefits of setting up a Virtual Data Room?
Before setting up a data room, it is essential to know what you will benefit from the procedure so that you know whether it is a worthy investment. Some of the key perks of setting aside space for a VDR include:
Safe data storage
When you store your files online without securing them, you place your company in jeopardy of unwarranted scrutiny, because anyone with basic knowledge on coding can hack the system and access your sensitive data. A VDR allows you to store critical information in a safe place, where only authorized persons can access.
Secure data sharing
If you constantly live with the fear of having your company’s data shared unsupervised, then you should get a VDR. A VDR is equipped with different levels of access that bar a person from accessing a higher level of security than where you give them access to. More so, they cannot take screenshots of any part of such information or copy and paste any data on the platform. As such, you can share information with the necessary persons without second-guessing your decision.
Transparency
One of the things that potential investors and partners look at before signing the contract papers is your level of transparency, especially when it comes to disclosing company documents and liabilities. A VDR allows you to ascertain the investors that you and your partners are the legitimate owners of the bank to pave way for investments. More so, you can always terminate the provision of this access in case the deal does not materialize.
Due diligence
In case you want to sell off your share of the bank, a VDR is a tool that will help you seal the deal. Any time you move money in and out of the bank, or an alteration to a particular document is made, the VDR captures that information and saves it. So, when the time comes to prove that you comply with all the regulations that regard the sale of your company, you only have to pull up the necessary records and expose them to your buyer.
Saves money and time
As a startup company, you should take every chance to save on cash and inject it into your financial organization. For instance, you can avoid setting up all rooms that require paperwork and opt for a VDR. It saves you the hassle of spending thousands of pounds on office stationery every year. And when it comes to saving time, you can always access any data on the virtual room from any location globally. As such, if you have to attend to a sensitive matter, you do not have to fly back to your country to access the necessary documents.
Final Take
Any established or startup bank or financial institution should consider setting up a VDR. It gets rid of certain overheads that can cost your company a lot of money. More so, it saves time and offers a high level of transparency, which is critical when you want to bring investors and partners on board.
