Due to the increasing cybersecurity threats, third-party risk management sales are increasing. The rapid increase in the digitilization in operating businesses needs prevention of risks and this is where third-party risk management software comes in. This software analyses the risks which occur due to third-party vendors and improves the integrity and productivity of the company.
At a compound annual growth rate of 14.7%, the size of the worldwide Third-Party Risk Management market is projected to reach US$ 19.7 Bn in 2032.
Covid-19 Impact and Market Status
The Covid-19 pandemic impacted business operations and the world economy. Due to the lockdown restrictions, people were made to work from home which led to the business working model going completely online. This increased the risk of security and increased the sale and demand for third-party risk management software. The Covid-19 pandemic also affected the third-party system and the ability to support the same.
To come back from this, the companies are offering remote access to the vendors. During the pandemic, companies have started investing heavily in technology and using them in their software for easier navigation and implementation.
Compliance Management Segment Expected to Rise
Based on the type of solution, there is an increasing need for compliance management for reporting requirements. Organizations are focusing on maintaining a system where there is transparency in financial matters which can lead to financial losses. The third-party risk management market takes the help of compliance management solutions to understand the rules & regulations, policies, and how to apply them globally. These factors are helping boost the global third-party risk management market demand in terms of revenue.
North America to Hold the Majority Market Size by the End of the Forecast Period
North America has a significant geographical presence, research & development activities, strategic investments, and partnerships that help grow the global third-party risk management market. Even though, a lack of awareness of management software has been a major barrier to the growth of the global market. Investment costs are higher for the software which is another challenge for the global market. However, during the pandemic, the increasing use of machine learning and artificial intelligence in North America has spurred many opportunities in the global market.
The rise in demand for third-party risk management has been rising due to the increasing security breaches, third-party risks, and reputational damage due to supply chain attacks. It helps reduce operational risks, reputational risks, cybersecurity risk attacks, financial risks, legal, and strategic risks.
Rapid applications of third-party risk management are seen in platforms like SignalX, Aravo, Metric Stream, Coupa, and Refinitiv. These platforms offer risk management for third-party and help reduce risks and other costs. Advantages like being able to access future risks, provide solutions for your vendors, maintain reputation & quality products, and financial efficiencies are encouraging the adoption of third-party risk management functions. These factors are also accountable for the rise of the global market and the rise in terms of revenue. Government restriction policies have also helped prevent cyberattacks on small, medium, and large-scale enterprises.
The third-party risk management global market is estimated to reach 19.3 billion by 2032 with a 14.9% CAGR during the forecast period 2022-2032. Increasing cyberattacks and incompetencies have led to immense growth in the global market. Small medium-scale enterprises have adopted these risk management solutions faster than large-scale enterprises. North America has said to be a dominant region in the third-party risk management global market. Strategic investments, mergers & acquisitions have to the growth of third-party management in the North American region.
The process of scrutinizing risks related to the outsourced third-party vendors and service providers. It focuses on identifying risks related to vendors, suppliers, contractors, and service providers and helps reduce costs. The company monitors the relationship between the external and internal parties. This helps in reducing risks related to third-party vendors. These entities can also include non-contractual parties. Third-party risk management is important as it directly impacts your organization and your cybersecurity, which can ultimately lead to reputational damage. Every third-party vendor has a risk for attacks and data breaches and is very accessible if the surface is vulnerable.
Technology like artificial intelligence-based software has been creating opportunities as their demand is high due to the growing cyberattacks. An increase in advanced technologies has led to the easy implementation of the software and helped reduce costs for the companies. However, third-party risk management software has certain challenges faced such as the high costs of setting up the software and data. The pandemic disrupted the global economy which has affected a lot of companies.
Companies deal with lots of vendors which can cause third-party risks on a wide basis. Another challenge faced by the companies is insufficient awareness and training. If the company policies are communicated effectively, this might affect the business. However, companies have started providing their third-party software which helps reduce the risk of data breaches. Innovations in data analytics and automation have helped create opportunities for the same. Implementation of constant monitoring of third-party vendors increases transparency. There is a tremendous rise in the hybrid cloud infrastructure.
The major players in the third-party risk management market are Genpact, Deloitte, Ernst & Young (E&Y), Prevalent, KPMG, IBM, Aravo Solutions, Optiv Security, RSA Security, Bigsight Technologies, Metric Stream, and NAVEX Global. These players have invested to expand their presence globally. Metric Stream has software that gives a transparent view to its vendors and efficiently integrates monitoring, collection of information, and vendor onboarding.
Prevalent has an automated platform that is cloud-based and standardizes vendor risk management & monitoring. This platform is integrated with other security solutions through Connector Marketplace.
Latest Innovations in the Global Third-party Risk Management Market: A Snapshot
- Genpact, in October 2019, launched a digital platform “Genpact Cora” with a partnership with Trade shift by combing the B2B network and digital business.
- KPMG has gained a competitive advantage compared to its competitors as it launched a patent technology to monitor third-party risks. It helps identifies threats in real-time. KPMG, in July 2019, was awarded for this technology.
- Ernst & Young acquired Pangea Legal Managed Services (LMS) which helped strengthened its capabilities regarding contract lifecycle management and regulatory risk compliance.
Third-Party Risk Management Market Scope
|Forecast Unit||Value (USD)|
|Revenue forecast in 2032||USD 19.7 billion|
|Growth Rate||CAGR of 14.7 % during 2022-2032|
|Segment Covered||Deployment Model, End User, Industry, Regions|
|Regions Covered||North America, Europe, Asia Pacific, Middle East and Africa, South America|
|Key Players Profiled||Genpact, Deloitte, Ernst & Young (E&Y), Prevalent, KPMG, IBM, Aravo Solutions, Optiv Security, RSA Security, Bigsight Technologies, Metric Stream, and NAVEX Global|
Key Segments of the Global Third-party Risk Management Market
Deployment Model Overview (USD Billion)
Industry Overview (USD Billion)
- IT & Telecom
End Use Overview (USD Billion)
- Professional & Managed Services
- Contract Management
- Audit Management
- Operational Risk Management
- Solutions & Services
Regional Overview (USD Billion)
- Rest of Europe
The Asia Pacific
- Rest of Asia Pacific
- Rest of South America
The Middle East and South Africa