Third-party Risk Management Market Size was valued at USD 7.5 billion in 2021. The third-party risk management market industry is projected to grow from USD 8.68 Billion in 2022 to USD 24.25 billion by 2030, exhibiting a compound annual growth rate (CAGR) of 15.8% during the forecast period (2024 - 2030). The rise in the use of third-party vendors by both small and large organizations, the need to monitor and analyze vendor performance, the need for effective management of the vendor ecosystem, and the growing number of cybersecurity threats are the main factors propelling the third-party risk management market's revenue growth.
Figure 1: Third-party Risk Management Market Size, 2024-2030 (USD Billion)
Source: Secondary Research, Primary Research, MRFR Database, and Analyst Review
The rapidly growing trend of business digitalization to drive market growth
Industries becoming more automated and digitalized have seen more data security and privacy breaches. The market is becoming increasingly fragmented due to growing digitization, which adds to growing security and safety concerns. The prevalence of malware and cyber fraud will directly contribute to expanding third-party risk management solutions. Cyberattacks were ranked the fifth greatest risk in 2020 and have since become the norm in private and public sectors. As IoT cyberattacks alone are expected to rise by 2025, this risky industry will expand further in 2023. According to the World Economic Forum's 2020 Risk Report, the detection (or prosecution) rate in the United States is as low as 0.05 percent.
Large organizations are investing heavily in centralized data safety and security solutions. The increasing reliance on cloud-based data platforms to operate and mitigate data theft and cyber security concerns is propelling the market's growth rate to new heights. The increasing involvement of multiple third parties and the associated risks would drive the third-party risk management market share. It also analyses the risk type and eliminates or resolves it before affecting the entire firm. Third-party risk management is in high demand due to its competitive advantage, accelerated time to market, reduced costs, and raised probability. Furthermore, the growing need for third-party risk management solutions in highly regulated sectors like manufacturing, healthcare, and banking & finance is anticipated to present a wide range of opportunities for the stakeholders in the forecast period.
The third-party risk management market segmentation, based on components, includes solutions (finance management, compliance management, audit management, and operational risk management) and services (professional and managed). The solutions segment held the majority share in 2021, contributing to around ~42-45% of the third-party risk management market revenue. Third-party risk management (TPRM) solutions assist organizations in identifying and mitigating risks associated with outsourcing a few activities or operations. Various organizations in various industries have considered implementing effective solutions to regulate their partner ecosystem to reduce the risks related to managing vendors. Organizations are also incorporating the TPRM solution to automate, improve, and manage the complete risk assessment process for enhancing transparency and quantifying uncertainties.
The third-party risk management market segmentation, based on the deployment mode, includes on-premise and on-cloud. On-cloud dominated the market in 2021 and is anticipated to be the fastest-growing segment over the forecast period, 2022-2030, owing to the growing benefits it provides to enterprises in terms of scalability, self-solution, minimal maintenance, and elasticity at low costs. Moreover, the growing deployment of hybrid cloud solutions that assist enterprises in improving business operations, cost optimization, user experience, resource utilization, and application modernization is predicted to propel the market significantly over the coming years.
Figure 2: Third-party Risk Management Market, by Deployment Mode, 2021 & 2030 (USD Billion)
Source: Secondary Research, Primary Research, MRFR Database, and Analyst Review
The third-party risk management market segmentation, based on the organization size, includes SMEs and large enterprises. Large enterprises had the highest revenue share in 2021, owing to improved collaborative efforts, adaptability, lower operational expenses, and faster market time. Moreover, the growing need for large organizations to manage globally distributed supply chains and vendors is fueling segment growth. Besides, large enterprises' increased spending capacity in technological innovations has been among the key factors driving segment growth. Large companies also have multiple vendors that require effective management as they have long supply chains. As a result, there is a high demand in this segment for vendor risk management solutions.
By Region, the study provides market insights into North America, Europe, Asia-Pacific, and the Rest of the World. The North American third-party risk management market is expected to grow at a significant CAGR during the study period, accounting for USD 3.23 billion in 2021. The large share of this region is primarily attributed to enterprises' growing reliance on vendor risk management solutions to manage risks associated with vendors effectively, the regional presence of market leaders offering a variety of solutions at reasonable prices, and the increasing spending capacity of local enterprises on risk management solutions. Several prominent third-party risk management market players have a strong presence in North America, providing effective services to all industry verticals in the region.
Moreover, the major countries examined in the market report are the United States, Germany, Canada, France, the United Kingdom, Italy, Spain, India, Australia, Japan, South Korea, China, and Brazil.
Figure 3: THIRD-PARTY RISK MANAGEMENT MARKET SHARE BY REGION 2021 (%)
Source: Secondary Research, Primary Research, MRFR Database, and Analyst Review
The European third-party risk management market is the world's second-largest, owing to increased government regulatory frameworks and the growing adoption of risk management solutions in financial institutions across the region, particularly in the United Kingdom, Germany, France, and Spain. In June 2022, the professional services company Marsh unveiled its Cyber Incident Management (CIM) service, which will help clients in the UK and Europe prepare for, respond to, and recover from cyberattacks while also boosting their cyber resilience. Moreover, the growing reliance on third-party vendors by various organizations and the adoption of advanced technologies in risk management software are anticipated to provide plenty of opportunities for the market in this region. Further, the UK third-party risk management market held the largest market share, and the France third-party risk management market was the fastest-growing market in the European region.
The Asia Pacific third-party risk management market is expected to grow at the fastest CAGR from 2022 to 2030 due to the increasing focus on digitalization and rapid urbanization, which creates a growing number of third-party vendor requirements in small and large organizations across the region, particularly in China, Japan, and India. Besides, the growing number of security breaches and cyber-attacks in the region creates numerous opportunities. Asia Pacific was the most targeted region for cyber-attacks in 2021. Greater concern about cyber-attacks drives demand for network security and third-party risk management (TPRM) solutions throughout the region.
New product launches and service upgrades are expected to be the most effective ways for players in the third-party risk management (TPRM) industry to gain quick access to emerging markets and improve technological capabilities. Major market players are implementing various development strategies, including mergers & acquisitions, strategic agreements & contracts, and advancing, testing, and introducing more effective vendor solutions for risk management.
Key industry players are increasingly developing innovative and progressive solutions to expand their service offerings and market reach. Adopting technologically advanced solutions to streamline business processes will propel the third-party risk management industry forward in the coming years. Automation of business processes is made possible by IoT, machine learning, and artificial intelligence. Long-term market revenue growth will depend on businesses improving their risk management processes with the help of emerging technologies.
MetricStream offers integrated risk management solutions and governance, risk, and compliance (GRC) services and uses artificial intelligence to deliver complete solutions for organization and operational risk, internal audit, regulatory requirements, cyber risk, I.T., and third-party risk management on a unified system platform. MetricStream announced the launch of Arno software in April 2021, featuring several new features and improvements to its platform and offerings. New features were added to the third-party risk management, internal audit management, and policy & compliance management solutions. The corporation established a new standard for risk, governance, and compliance and integrated risk management, allowing organizations to leverage risk even more effectively.
Also, BitSight is a platform that uses a data-driven, outside-in approach to rate a company's security effectiveness daily. BitSight is a company that computes security ratings to provide insight into an organization's security performance and assess cyber risk. BitSight, a provider of third-party risk management (TPRM) solutions, acquired ThirdPartyTrust in August 2022. BitSight is integrating ThirdPartyTrust technology into its current third-party risk management market offerings to provide an end-to-end industry solution.
RSA Security LLC (US)
Genpact (US)
Cisco Systems (US)
Deloitte (US)
KPMG (The Netherlands)
Alyne GmbH (Germany)
Prevalent Inc (US)
BitSight (US)
OneTrust (US)
Aravo Solutions Inc (US)
October 2019: Genpact (US) collaborated with Tradeshift to combine the company's digital business platform, Genpact Cora, with Business-to-Business (B2B) networking technologies. The combined solution is for clients who want to connect their procurement processes to a network of suppliers and buyers.
August 2022: IBM released Trust Your Supplier, a brand-new blockchain-based supply chain risk management solution. The blockchain network enables businesses to validate and onboard their vendors more efficiently while ensuring a safe audit trail of buyer-supplier interactions throughout the supply chain.
Solution
Finance Management
Compliance Management
Audit Management
Operational Risk Management
Services
Professional
Managed
On-premise
On-cloud
SMEs
Large Enterprises
North America
US
Canada
Europe
Germany
France
UK
Italy
Spain
Rest of Europe
Asia-Pacific
China
Japan
India
Australia
South Korea
Australia
Rest of Asia-Pacific
Rest of the World
Middle East
Africa
Latin America
| Report Attribute/Metric | Details |
| Market Size 2021 | USD 7.5 billion |
| Market Size 2022 | USD 8.68 billion |
| Market Size 2030 | USD 24.25 billion |
| Compound Annual Growth Rate (CAGR) | 15.8% (2024-2030) |
| Base Year | 2023 |
| Market Forecast Period | 2024-2030 |
| Historical Data | 2018 & 2022 |
| Market Forecast Units | Value (USD Billion) |
| Report Coverage | Revenue Forecast, Market Competitive Landscape, Growth Factors, and Trends |
| Segments Covered | Component, Deployment Mode, Organization Size, and Region |
| Geographies Covered | North America, Europe, Asia Pacific, and the Rest of the World |
| Countries Covered | The U.S, Canada, Germany, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil |
| Key Companies Profiled | RSA Security LLC (US), Genpact (US), Cisco Systems (US), Deloitte (US), KPMG (The Netherlands), BitSight (US), Alyne GmbH (Germany), Prevalent Inc (US), OneTrust (US), Aravo Solutions Inc (US) |
| Key Market Opportunities | Emerging technical advances in automation and data analytics Favorable regulations and compliance requirements |
| Key Market Dynamics | Increasing demands for hybrid cloud infrastructure Increased adoption by a wide range of organizations for virtual competitive advantage |
Frequently Asked Questions (FAQ) :
The third-party risk management market size was valued at USD 7.5 Billion in 2021.
The market is projected to grow at a CAGR of 15.8% during the forecast period, 2022-2030.
North America had the largest share of the market.
The key players in the market are RSA Security LLC (US), Genpact (US), Cisco Systems (US), Deloitte (US), KPMG (The Netherlands), BitSight (US), Alyne GmbH (Germany), Prevalent Inc (US), OneTrust (US), and Aravo Solutions Inc (US).
The solutions category dominated the market in 2021.
In 2021, on-cloud had the largest share of the market.
Senior Research Analyst Ankit gupta is an analyst in market research industry in ict and semi industry. with post-graduation in "telecom and marketing management" and graduation in "electronics and telecommunication" vertical he is well versed with recent development in ict industry as a whole. having worked on more than 150+ reports including consultation for fortune 500 companies such as microsoft and rio tinto in identifying solutions with respect to business problems his opinions are inclined towards mixture of technical and managerial aspects.
Get in Touch
© 2024 Market Research Future ® (Part of WantStats Reasearch And Media Pvt. Ltd.)
