How the Drooms AI Assistant keeps deals confidential
Time is money, and in M&A transactions and real estate due diligence, so is data security. Ensuring compliance with GDPR and the EU AI Act while securing confidential deals is becoming increasingly complex. Our 2024 platform statistics indicate an 18.2% increase in page volume per transaction. Therefore, organisations require solutions that, not only accelerate due diligence and deal preparation but also keep sensitive information secure. Enter the Drooms AI Assistant: a cutting-edge tool that blends efficiency with robust data protection, setting new standards for due diligence in data rooms. The Drooms AI Assistant addresses traditional AI security challenges and adheres to regulatory standards like GDPR or the AI Act, ultimately supporting businesses in making smarter, faster, and safer decisions.
Why data security matters in M&A transactions & confidential deals
M&A and real estate transactions involve exchanging vast amounts of confidential information. Financial statements, legal documents, and sensitive contract terms are often stored in virtual data rooms, where they must be protected against unauthorised access, data breaches, and compliance violations.
Key challenges
- Data exposure: with confidential information shared digitally, the risk of data breaches increases. While virtual data rooms with granular access rights and audit trail like Drooms provide stellar protection and transparency, buy-side actors often need to download data and use external (AI) tools for analysis that might not be compliant.
- Regulatory compliance: non-compliance with regulations like the General Data Protection Regulation (GDPR) cause severe reputational consequences and lead to hefty penalties. The US Securities and Exchange Commission (SEC) recently fined eight investment firms with a total of $63 million for allowing employees to conduct business on non-compliant platforms.
- Operational delays: on the other hand, overly complex security processes and traditional manual document reviews slow down due diligence and deal preparation, risking missed opportunities in fast-paced markets.
To overcome these challenges, modern solutions must integrate the efficiency of AI for document review with the robust security measures directly into the secure data room environment.
Why external AI tools fall short in secure data rooms
Many external AI tools AI solutions like ChatGPT or Deepseek are hosted on a public cloud and fall short to safeguard sensitive data in high-stakes environments. Common pitfalls include:
- Data Processing on a public cloud: public cloud-based AI platforms rely on shared, multi-tenant architectures. This can raise concerns about data residency, sovereignty, and regulatory compliance—especially in jurisdictions that require local data hosting.
- Inadvertent data training: third-party AI models use input data to continuously train and improve their algorithms. This can lead to confidential information being embedded in the AI’s model weights, posing long-term security risks and making true data deletion nearly impossible.
- No access right management: data rooms provide granular access rights, controlling who can see what and when. General purpose AI platform typically lack these fine-grained permission settings, making unauthorized data exposure more likely.
- No audit trails: without comprehensive auditing and reporting capabilities, it’s difficult to track user activities, ensure accountability, or demonstrate compliance—critical in regulated M&A and real estate transactions.
- Insufficient compliance measures: many publicly available AI platforms offer only basic encryption and access controls and thus are insufficient for high-stakes transactions involving intellectual property, trade secrets, or personal data.
By contrast, the Drooms AI Assistant operates entirely within the secure data room environment, ensuring strict adherence to access-right controls and compliance requirements. This approach keeps sensitive deal information fully under your control and never exposed to the security gaps often found in public external AI solutions.
How the Drooms AI Assistant enhances security & compliance
The Drooms AI Assistant is built from the ground up to prioritise both efficiency and data protection. Here’s how it transforms the way confidential deals are managed:
1. Secure data room integration
Unlike many AI solutions that externally process your data on yet another cloud platform, the Drooms AI Assistant is fully embedded within the secure Drooms data room. This integration ensures that:
- Data stays in-house: The AI Assistant is embedded directly within the secure Drooms data room. All processing occurs internally, ensuring that sensitive data never leaves a controlled, encrypted environment with servers in Germany.
- Strict access controls: Only authorised users can access the data and the AI functionalities, drastically reducing the risk of unauthorised exposure.
2. Data confidentiality in AI model training
Unlike many third-party AI solutions, the Drooms AI Assistant does not use the data processed on the platform to train AI models.
- No data leakage: your confidential information remains isolated within your secure environment and never becomes part of an AI training dataset. Thus, your data can never leak through the AI via inference to a third party.
- Enhanced control: Organisations retain full control over their data, ensuring that proprietary and sensitive information is not inadvertently exposed or reused in external AI systems.
3. Compliance with GDPR
Regulatory compliance is non-negotiable in today’s digital landscape. The Drooms AI Assistant adheres to stringent standards set by GDPR by:
- Data privacy: Designed with privacy in mind, the system handles personal and sensitive data according to the highest standards dictated by GDPR.
- Audit trails and consent management: Detailed logging and consent mechanisms ensure full transparency and accountability, crucial for regulatory compliance and legal auditing.
4. Alignment with the EU AI Act
The recently introduced EU AI Act sets new benchmarks for ethical and transparent AI use. Key aspects of the act that the Drooms AI Assistant addresses include:
- Risk management: the system incorporates regular risk assessments to identify vulnerabilities and implement necessary safeguards.
- Transparency: the assistant leverages Retrieval-Augmented Generation (RAG) to reference source content directly. By showing exactly where data is pulled from, the system meets the EU AI Act’s requirement for transparency, giving users insight into how decisions are made.
- Protection of user rights: By offering clear explanations and contextual insights, the AI Assistant empowers users and protects their rights under the act.
5. Advanced security protocols
Beyond integration and regulatory compliance, the AI Assistant is embedded in our secure data room environment that offers cutting-edge security measures:
- Encryption: all data is encrypted both in transit and at rest ensuring robust protection against cyber threats.
- Multi-Factor Authentication (MFA): MFA adds an extra layer of security by ensuring that only verified users can access critical functions within the data room.
- Regular Security Audits: continuous monitoring and periodic audits help maintain a resilient security posture, keeping pace with evolving cybersecurity threats.
Efficiency meets security: Smarter workflows without compromising confidentiality
The Drooms AI Assistant isn’t just about confidentiality—it’s also about accelerating workflows and eliminating bottlenecks. By combining intelligent automation with secure processing, it enables professionals to work faster without increasing risk.
Key productivity gains:
- Automated document review: The AI Assistant quickly scans, categorises, and extracts key insights from large volumes of documents, reducing manual effort by up to 50%.
- Faster due diligence: Intelligent data extraction highlights critical clauses and risk factors, streamlining deal preparation and review processes.
- Enhanced decision-making: Real-time insights and contextual references ensure that users have the information they need without sifting through mountains of documentation.
By reducing time-intensive tasks, professionals can focus on higher-value strategic analysis while maintaining full control over sensitive information.
Why investing in secure AI is a strategic advantage
In today’s competitive and highly regulated landscape, companies must balance innovation with risk management. Secure AI isn’t just a safeguard—it’s a business enabler. Here’s why decision-makers should prioritise rolling out AI within their organisations:
1. Competitive edge
- Companies leveraging secure AI accelerate deal-making, gaining a distinct advantage over competitors reliant on manual processes or insecure AI models.
- Secure AI enables faster, data-driven decision-making, positioning firms as market leaders.
2. Regulatory readiness
- Compliance with GDPR and the EU AI Act ensures firms avoid costly regulatory fines and reputational damage.
- Early adoption of secure AI demonstrates a commitment to responsible innovation, attracting investors and partners.
3. Risk reduction
- Secure AI minimises the financial and legal risks associated with data breaches and compliance failures.
- A trusted AI solution reassures stakeholders that confidentiality and security are top priorities.
4. Future-proofing business operations
- AI adoption is no longer optional. Businesses that fail to integrate AI will fall behind in efficiency and deal execution.
- Investing in secure AI today ensures resilience, operational efficiency, and long-term growth.
Conclusion
With rising data security challenges and increasing regulatory scrutiny, adopting a secure AI solution like the Drooms AI Assistant isn’t just an option—it’s a strategic necessity. Organisations prioritising both efficiency and security will be best positioned for success in the digital deal-making era.
Ready to integrate AI into your deal-making process? Contact us today to learn more or request a demo!
