In asynchronous serial communication the receiving device has only a limited buffer, so if the sender transmits faster than the receiver can process, that buffer can overflow and data can be lost.

Hardware handshaking using the RTS (Request To Send) and CTS (Clear To Send) control lines provides flow control, so its role is to prevent data loss by managing buffer overflow.

When the receiver's buffer is nearly full, it de-asserts the CTS line, signalling the sender to pause; once space is available again the line is re-asserted and transmission resumes.

This is a physical-signal (hardware) form of flow control, distinct from software flow control that uses special characters in the data stream.

It does not synchronise the two devices' internal clocks — asynchronous communication instead relies on start and stop bits framing each character for timing.

It does not encrypt the data, because the RTS/CTS lines carry only control signalling, not the payload.

Error detection using parity bits is a separate mechanism entirely, so that option is not the role of handshaking.

Hence the correct answer is To prevent data loss by managing buffer overflow.