Vendor Risk Management Market Analysis

Vendor Risk Management Market Overview

The Vendor Risk Management market size is projected to grow from USD 6.4581 billion in 2024 to USD 15.6 billion by 2032, exhibiting a compound annual growth rate (CAGR) of 11.65% during the forecast period (2024 - 2032). Additionally, the market size for Vendor Risk Management was valued at USD 5.7 billion in 2023.

Increases in the number of third-party providers in large organisations, as well as an increase in the demand for cloud-based VRM solutions in small and medium-sized businesses are the key market drivers enhancing the market growth.

Figure1: Vendor Risk Management Market, 2018 - 2032 (USD Billion)

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Vendor Risk Management Market Trends

Prevalence of third-party vendors in both public and private sector organizations fuels the market's growth

The market's CAGR for vendor risk management is being driven by the growing use of third-party vendors by both public and private sector organizations, the quickening pace of market-specific rule and regulation change, and the requirement to track, manage, and assess vendor performance. Nowadays, businesses have expended a lot of time and effort vetting the suppliers of the goods and services that satisfy their particular business needs. The process of determining crucial vendor performance factors is sped up by VRM systems, and the deliverability, quality, and cost of the vendor's goods are used as the primary metrics for gauging vendor performance. Vendor risk management software can help professionals investigate and spot important risks when procuring goods and services from third parties if the organization interacts with a number of vendors.

Also, a large number of businesses still rely on manual methods to identify threats and are not aware of the benefits of vendor risk management services and products in reducing vendor risk, which is a factor restricting the vendor risk management market size.

For instance, a third-party vendor's error resulted in a data leak in January 2019 that affected several banks and financial organizations in the United States. Ascension had misconfigured a server that was used to store digital copies of paper financial documents, which led to the data leak. As a result, a database containing over 24 million credit reports including sensitive client information might be accessed, thus fueling the market for vendor risk management's revenue.

Vendor Risk Management Market Segment Insights

Vendor Risk Management Component Insights

The vendor risk management market segmentation, based on component includes Solutions and Services. The service segment holds a large number of shares in the market because increasing the adoption of the vendor risk management service in the segment is the factor that boosts the market growth of the Vendor Risk Management Market.

Vendor Risk Management Solutions Insights

Assessment Management, Quality Management, and Contract Management are among the solutions that make up the worldwide vendor risk management market segmentation. Market share for quality management was sizable. In order to maintain a desired degree of perfection, all activities and tasks must be under the control of quality management. Establishing a quality policy, coming up with and carrying out quality assurance and planning, as well as quality control and improvement, are all included in quality management.

Vendor Risk Management Deployment Insights

The vendor risk management market segmentation, based on deployment, includes on-cloud and on-premise. The segment with on-cloud deployment had the biggest revenue share in 2022 with over 85.0%. The significant market share of this sector is mostly due to the expanding benefits it provides to businesses in terms of scalability, self-solution, low maintenance, and flexibility at competitive rates. The market is anticipated to grow significantly over the course of the forecast period as a result of the rising deployment of hybrid cloud solutions that support organizations in improving business operations, cost efficiency, resource consumption, user experience, and application modernization. Additionally, it is projected that over the course of the forecast period, the market would be driven by companies' growing interest in updating their current IT infrastructure with the aid of the adoption of cloud-based solutions.

Figure 2: Vendor Risk Management Market, by Deployment, 2022 & 2032 (USD billion)

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Vendor Risk Management Regional Insights

By Region, the study provides the market insights into North America, Europe, Asia-Pacific and the Rest of the World. A significant percentage of the market is held by the North American area as a result of the development of cutting-edge technologies in machine learning, deep learning, IoT, cloud computing, and Industrial 4.0, as well as the growing emphasis on data security and increased investment. A result of sophisticated technological advancements in AI, deep learning, software as a service, and internet of things, the growth of end-user industries like healthcare, manufacturing, and others, an increase in invested capital, and a growing emphasis on cyber security, the region's vendor risk management market is developing.

Further, the major countries studied in the market report are The U.S., Canada, German, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.

Figure2: VENDOR RISK MANAGEMENT MARKET SHARE BY REGION 2022 (%)

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Europe’s vendor risk management market accounts for the second-largest market share due to increasing reliance on third-party vendors by different organizations and adoption of advanced technologies in risk management software are expected to provide ample opportunities for the market in this region. Further, the German vendor risk management market held the largest market share, and the UK vendor risk management market was the fastest-growing market in the European region

The Asia-Pacific Vendor Risk Management Market is expected to grow at the fastest CAGR from 2023 to 2032. This is due to increasing incidents of security breaches and cyber-attacks across the region creates ample opportunities across the region. Moreover, China’s vendor risk management market held the largest market share, and the Indian vendor risk management market was the fastest-growing market in the Asia-Pacific region.

Vendor Risk Management Key Market Players & Competitive Insights

Leading market players are investing heavily in R&D in order to expand their product lines, which will help the vendor risk management market, grow even more. Market participants are also undertaking a variety of strategic activities to expand their footprint, with important market developments including new product launches, contractual agreements, mergers and acquisitions, higher investments, and collaboration with other organizations. To expand and survive in a more competitive and rising market climate, vendor risk management industry must offer cost-effective items.

Producing locally to reduce operating costs is one of the primary business strategies utilized by manufacturers in the vendor risk management industry to benefit customers and expand the market sector. Some of the most important benefits to medicine have recently been provided by the vendor risk management industry. Major players in the vendor risk management market, including IBM Corporation (US), MetricStreem (US), Lockpath Inc. (US), Logic Manager (US), Rsam (US), BitSight Technologies (US), RSA (US), Genpact (US), Resolver (Canada), SAl (Australia), Optiv (US), and others, are working to boost market demand by investing in research and development activities.

RSA (Rivest-Shamir-Adleman) is a popular public-key cryptosystem for secure data transmission. It is also among the oldest. The abbreviation "RSA" is derived from the surnames of Ron Rivest, Adi Shamir, and Leonard Adleman, who published the method in 1977. Clifford Cocks, an English mathematician, devised a comparable method in secret at Government Communications Headquarters (GCHQ), the British signals intelligence organization, in 1973. In 1997, that system was declassified. In February 2020, RSA a firm delivering Business-Driven Security solutions to help organizations manage digital risk announced that it will be providing RSA Archer SaaS (software as a service) for customers seeking to implement the RSA Archer Suite in the cloud. The RSA Archer Suite helps organizations at any stage in their risk management maturity journey to more effectively and efficiently manage risk.

The International Business Machines Corporation (IBM), also known as Big Blue, is a multinational technology business headquartered in Armonk, New York, with operations in more than 175 countries. It specializes in computer hardware, middleware, and software, as well as hosting and consulting services spanning from mainframe computers to nanotechnology. IBM is the world's largest industrial research organization, with 19 research labs in a dozen countries. From 1993 to 2021, IBM held the record for the most yearly U.S. patents generated by a firm for 29 years. In August 2019, IBM announced the launch of a new blockchain-powered solution aimed at mitigating supply chain risk. Trust Your Supplier, the blockchain network enables businesses to more efficiently validate and onboard their vendors while maintaining a secure audit trail of buyer-supplier interactions down the supply chain.

Key Companies in the vendor risk management market include

• 
  

  IBM Corporation (U.S.)

  
  


• 
  

  MetricStream (U.S.)

  
  


• 
  

  Lockpath Inc. (U.S.)

  
  


• 
  

  Logic Manager (U.S.)

  
  


• 
  

  Rsam (U.S.)

  
  


• 
  

  BitSight Technologies (U.S.)

  
  


• 
  

  RSA (U.S.)

  
  


• 
  

  Genpact (U.S.)

  
  


• 
  

  Resolver (Canada)

  
  


• 
  

  SAI (Australia)

  
  


• 
  

  Optiv (U.S.)

  
  


• 
  

  Quantivate (U.S.)

  
  


• 
  

  RapidRatings (U.S.)

  
  


• 
  

  Process nity (U.S.)

  
  


• 
  

  VendorInsight (U.S.)

  
  

Vendor Risk Management Industry Developments

In July 2020:KPMG received a US Patent for a system to monitor and disclose vulnerabilities from third parties. This would provide its third-party intelligence offerings—which track and identify risks to third-party networks in real time—a significant competitive edge over its rivals in the TPRM.

In June 2020:EY acquired Thomson Reuters' Pangea3 Legal Managed Services (LMS) subsidiary. As a result of this acquisition, Pangea3 LMS's capabilities in the areas of contract life cycle management, regulatory risk and compliance, and investigations would be enhanced.

In March 2021:fresh updates were made to RSA Archer, its integrated third-party threat control platform. Product enhancements, including automated risk identification and assessment, cutting-edge analytical and evaluation platforms, and extensive integrations, increase customers' capacity to quickly and effectively identify, evaluate, and manage critical components of digital risk.

Vendor Risk Management Market Segmentation

Vendor Risk Management Market By Component Outlook

• 
  

  Solution

  
  


• 
  

  Service

  
  

Vendor Risk Management Market By Solutions Outlook

• 
  

  Assessment Management

  
  


• 
  

  Quality Management

  
  


• 
  

  Contract Management

  
  

Vendor Risk Management Market By Deployment Outlook

• 
  

  On-Cloud

  
  


• 
  

  On-Premise

  
  

Vendor Risk Management Regional Outlook

• 
  

  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