Enjoy complimentary customisation on priority with our Enterprise License!
The third-party risk management market size is forecast to increase by USD 7.42 billion at a CAGR of 16.76% between 2023 and 2028. The market is experiencing significant growth due to the increasing importance of operational risk management in various industries. Compliance mandates, such as the General Data Protection Regulation (GDPR) and the Bank Secrecy Act (BSA), have heightened the need for the third-party risk management solutions. The integration of artificial intelligence (AI) and machine learning (ML) in third-party risk management software is a notable trend, enabling automated risk assessments and real-time monitoring. However, the rise of open-source risk management software poses a challenge, as it may lack the advanced features and support offered by professional and managed services. Key sectors, including IT and Telecom, Energy and Utilities, and Compliance Management, are investing in third-party risk management solutions to mitigate risks and ensure regulatory compliance. Audit management remains a crucial aspect of third-party risk management, as it helps organizations maintain transparency and accountability in their company relationships. Overall, the benefits of third-party risk management, coupled with technological advancements and regulatory requirements, are driving market growth.
The market is witnessing significant growth due to the increasing number of cyber-attacks and data theft incidents. New generation technologies such as artificial intelligence (AI) and machine learning (ML) are being adopted to enhance security management and mitigate risks. Policy-driven compliance and cyber monitoring are becoming essential components of third-party risk management solutions. Governments and large companies are implementing restriction policies to ensure data management and financial control. The market competition is intensifying as organizations seek competitive advantage through efficient risk management. The deployment mode, organization size, vertical, and solution type are key factors influencing the market time, costs, and probabilities.
Moreover, integration platforms and training programs are crucial for end-user experience and productivity. Capital investments and workforce skills are essential for successful implementation. The solution's deployment mode, organization size, and vertical are significant factors in determining the competitive landscape. The market is expected to grow significantly in the coming years, driven by the increasing need for effective risk management in the face of evolving threats.
The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD billion" for the period 2024-2028, as well as historical data from 2018-2022 for the following segments.
The solution segment is estimated to witness significant growth during the forecast period. Third-party risk management solutions play a crucial role in large companies by mitigating potential risks associated with companies, suppliers, and contractors. These solutions provide an integrated, real-time view of the extended enterprise to safeguard an organization's business from third-party risk exposure. The software, often delivered as a service (SaaS), automates end-to-end processes, including information gathering, onboarding, real-time monitoring, risk assessments, compliance checks, and risk mitigation. Artificial intelligence (AI) and machine learning technologies are increasingly being integrated into third-party risk management solutions to enhance their capabilities. Data management is a significant concern for organizations when sharing information with external entities.
Moreover, effective third-party risk management not only ensures data security but also builds trust and confidence in third-party relationships, leading to mutual growth. Compliance with various regulations is another essential aspect of third-party risk management, providing a competitive advantage to organizations that can manage these risks effectively.
Get a glance at the market share of various segments Request Free Sample
The solution segment was valued at USD 2.15 billion in 2018 and showed a gradual increase during the forecast period.
North America is estimated to contribute 45% to the growth of the global market during the forecast period. Technavio's analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
For more insights on the market share of various regions Request Free Sample
The European the market is projected to expand at a consistent pace due to the increasing need for regulatory compliance among large companies. In 2012, the European Union introduced the European Markets Infrastructure Regulation (EMIR), which came into effect in 2014. This regulation aims to enhance transparency in European derivative markets, central counterparties (CCPs), and trade repositories (TRs) by regulating over-the-counter (OTC) derivatives. OTC derivatives refer to contracts traded between two parties without the involvement of exchanges or intermediaries. The EMIR was established to minimize risks associated with derivatives markets. In May 2019, the European Commission proposed EMIR Refit to alleviate the compliance burden on small financial and non-financial organizations.
Moreover, artificial intelligence and machine learning technologies are increasingly being adopted in third-party risk management to improve risk assessment and mitigation. Data management is a crucial aspect of third-party risk management, and advanced technologies like AI and ML enable more effective and efficient data analysis. Compliance with such regulations provides a competitive advantage for companies by ensuring risk reduction and transparency in their operations.
Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
Benefits associated with third-party risk management are the key drivers of the market. The market has gained significant importance in today's business landscape due to the increasing use of new-generation technologies and the growing competition among organizations. With the rise of cyber-attacks and data theft, the need to manage risks associated with third-party companies has become crucial for businesses. Third-party risk management involves mitigating various types of risks, including cybersecurity, compliance, reputational, financial, operational, and strategic risks. Governments worldwide are also emphasizing policy-driven compliance, making it mandatory for organizations to implement the third-party risk management practices. Cyber monitoring and security management have become essential components of third-party risk management, helping organizations to identify and mitigate potential risks before they cause significant damage.
Moreover, the increasing reliance on third-party companies for supply chain, data, infrastructure, and services has led to an increase in third-party risk. Failure to manage these risks appropriately can result in significant losses for organizations. Therefore, adopting third-party risk management solutions is vital for businesses to gain visibility and control over their third-party relationships and drive growth. These solutions offer integration, automation, and collaboration capabilities that help organizations manage risks effectively and maintain a secure and compliant business environment.
Integration of artificial intelligence and machine learning in third-party risk management software solutions is the upcoming trend in the market. The market is witnessing significant growth due to the increasing number of cyber-attacks and data theft incidents. New generation technologies, such as Artificial Intelligence (AI) and Machine Learning (ML), are enabling more sophisticated risk assessments by analyzing large datasets and identifying patterns that may not be apparent through traditional methods. This proactive approach allows organizations to gain deeper insights into potential risks associated with their third-party relationships and predict potential risks based on historical data and ongoing monitoring. AI and ML algorithms automate the monitoring of third-party activities, including continuous company behavior analysis, regulatory compliance, and other risk indicators. Moreover, the automated alerts and notifications facilitate rapid responses to emerging risks, enhancing overall risk management effectiveness.
Threat from open-source risk management software is a key challenge affecting the market growth. The market is experiencing significant competition as new generation technologies continue to emerge. Cyber-attacks and data theft pose significant risks to organizations, leading to a heightened focus on policy-driven compliance and cyber monitoring for security management. Governments worldwide are also increasing regulations to ensure data protection. However, the availability of open-source application software is a challenge for the market's growth. Open-source software, developed and offered freely by organizations or communities, is increasingly adopted by startups and small to medium-sized enterprises due to cost savings. Notable open-source third-party risk management solutions include Open PPM, OpenPro, CK-EFP, and Open Source Risk Engine (ORE). Despite the cost advantages, organizations must ensure the security and reliability of these solutions to mitigate potential risks.
The market forecasting report includes the adoption lifecycle of the market, covering from the innovator's stage to the laggard's stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
The market research and growth report includes detailed analyses of the competitive landscape of the market and information about key companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market is witnessing significant growth due to the increasing number of cyber-attacks and data theft incidents. New generation technology, such as artificial intelligence (AI) and machine learning (ML), is being adopted for cyber monitoring and security management to mitigate these risks. Policy-driven compliance and regulatory mandates are also driving the market, with governments imposing restriction policies on large companies to ensure data management and financial control. Organizations are investing heavily in integration platforms, training programs, and professional services to enhance their risk management capabilities. The market competition is intensifying as companies seek to gain a competitive advantage through advanced risk management solutions.
Moreover, the operational risk management, compliance management, contract management, audit management, and financial control management are the key solution areas in the market. The market caters to various verticals, including IT and telecom, energy and utilities, and others. The deployment mode, organization size, and deployment segment, such as cloud, are also important factors influencing the market's growth. Operational risks, financial risks, transaction risks, and strategic threats are the various risk types addressed by third-party risk management solutions. Costs, probabilities, and deployment modes are critical factors that influence the selection of third-party risk management solutions. The market's growth is also impacted by the end-user experience, productivity, and capital investments required for deployment and implementation.
Market Scope |
|
Report Coverage |
Details |
Page number |
165 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 16.76% |
Market growth 2024-2028 |
USD 7.42 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
16.56 |
Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
Performing market contribution |
North America at 45% |
Key countries |
US, China, Germany, UK, and France |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Aravo Solutions Inc., BitSight Technologies Inc., Dell Technologies Inc., Deloitte Touche Tohmatsu Ltd., Diligent Corp., Ernst and Young Global Ltd., Genpact Ltd., iMedX Inc., KPMG International Ltd., Kroll LLC, MetricStream Inc., NAVEX Global Inc., OneTrust LLC, Optiv Security Inc., PricewaterhouseCoopers LLP, ProcessUnity Inc., Rapid Ratings International Inc., Riskpro India Ventures Pvt. Ltd., SAI Global Pty. Ltd., and Venminder Inc. |
Market dynamics |
Parent market analysis, market growth inducers and obstacles, market forecast, fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, market condition analysis for the forecast period |
Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements. Get in touch
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Component
7 Market Segmentation by Deployment
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
Get the report (PDF) sent to your email within minutes.
Get lifetime access to our
Technavio Insights
Quick Report Overview:
Cookie Policy
The Site uses cookies to record users' preferences in relation to the functionality of accessibility. We, our Affiliates, and our Vendors may store and access cookies on a device, and process personal data including unique identifiers sent by a device, to personalise content, tailor, and report on advertising and to analyse our traffic. By clicking “I’m fine with this”, you are allowing the use of these cookies. Please refer to the help guide of your browser for further information on cookies, including how to disable them. Review our Privacy & Cookie Notice.