In one sentence
Overlaying documents with identifying marks, such as user and timestamp, to deter and trace unauthorized sharing.
The longer version
Watermarks stamp who viewed or downloaded a document and when, discouraging leaks and helping trace them. Dynamic watermarking ties each view to the specific user, a standard data room security feature.
Watermarking is part of the document-security layer lenders expect when sensitive files move among many parties.
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