Third-Party Risk Management Market Analysis North America, Europe, APAC, South America, Middle East and Africa - US, China, Germany, UK, France - Size and Forecast 2024-2028

Third-Party Risk Management Market Forecast 2024-2028 :

The third-party risk management market size is projected to increase by USD 7.42 billion, at a CAGR of 16.76% between between 2023 and 2028. The growth rate of the market depends on several factors, including benefits associated with third-party risk management, the rise in adoption of cloud-based third-party risk management and exponential growth in corporate data. Third-party risk management refers to the process of identifying, assessing, and mitigating the potential threats associated with external entities such as vendors, suppliers, or service providers. This practice involves evaluating the impact of third-party relationships on an organization's operations, reputation, and compliance. Effective third-party risk management aims to ensure that external partners align with the organization's goals and adhere to regulatory requirements.

The market growth and forecasting report includes key player's detailed analyses of the competitive landscape of the market and information about 20 market companies, including 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. Additionally, BitSight Technologies Inc. provides comprehensive third-party risk management solutions, empowering risk leaders to effectively manage their digital ecosystem from start to finish through measurement and continuous monitoring of third-party security.

What will be the Size of the Market During the Forecast Period?

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Market Overview

Market  Growth Analysis Driver

Benefits associated with third-party risk management are notably driving market growth. Increasing global supply chain and hosted data, infrastructure, and services have long contributed to third-party risk owing to increasing reliance on outsourcing. It typically covers various areas of threat, which include cybersecurity, compliance, reputational threat, financial threat, operational threat, and strategic risk. If third-party vendors are not managed properly, then organizations may face losses. It gives organizations an understanding of the third parties they use. It offers integration, automation, visibility, and collaboration capabilities that help to manage risk and drive the growth of the organization.

Moreover, it reduces company, supplier, and third-party risks with this management software or services. The software enables organizations to run compliance checks and screen vendors. Therefore, it is used widely within organizations. An increase in the adoption of third-party risk management by the IT, government, and other sectors is expected to boost the growth of the market during the forecast period. 

Market Growth and Trends

Integration of artificial intelligence and machine learning in third-party risk management software solutions is an emerging trend shaping market growth. AI and ML enable more sophisticated threat assessments by analyzing large datasets and identifying patterns that may not be apparent through traditional methods. This allows organizations to gain deeper insights into potential threat associated with their third-party relationships. AI and ML algorithms can predict potential risks based on historical data and ongoing monitoring. This proactive approach enables organizations to anticipate and mitigate threats before they escalate, enhancing overall risk management effectiveness. The automation capabilities of AI and ML streamline the monitoring of such activities. 

Further, AI and ML assist in processing vast amounts of data quickly, enabling faster and more informed decision-making in response to emerging threat. This agility is essential in dynamic business environments where timely actions can mitigate potential damage. Overall, the integration of AI and ML by companies such as SAP in third-party risk management enhances the precision, proactiveness, and efficiency of risk mitigation strategies, which will drive the growth of the market during the forecast period. 

Market Restrain

Threat from open-source risk management software is a significant challenge hindering market growth.  Open-source application software is developed and offered by organizations or a community of developers free of cost. The high cost of such software has led to an increase in the adoption of open-source applications, especially among organizations with low IT budgets. The majority of the startups and SMEs operating with low IT and marketing budgets do not invest in perpetual software licenses and subscription costs. There are various open-source such threat management solutions available in the market, including Open PPM, OpenPro, CK-EFP, and Open Source Risk Engine (ORE). 

Moreover, the increase in demand for risk management and the need to keep track of assets in financial institutions have led to new companies that offer freeware to enter the market during the forecast period. Hence, organizations are moving toward cost-effective cloud-based offerings. The availability of open-source risk management software will be a major challenge for the growth of the market during the forecast period.

Market Segmentation By Component

The market share growth by the solution segment will be significant during the forecast period. This management solutions comprise software such as software-as-a-service (SaaS) that provides an integrated, real-time view of the extended enterprise (such as companies, suppliers, and contractors) to protect the business of an organization from the existing third-party or other potential fourth-party risk exposure. 

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The solution segment was the largest and was valued at USD 2.15 billion in 2018. These solutions help enhance business performance by enabling intelligence and visibility of organizations into third-party relationships for greater threat awareness and informed business decisions. It significantly reduces the time, effort, and costs involved in such assessments by auto-segmenting third parties and by enabling a structured assessment process, which, in turn, reduces the risk of third-party companies. It safeguards an organization against various risks, such as cyber-attacks and compliance (third-party risk management) solutions. It specializes in onboarding, risk assessment, and due diligence for organizations working with third parties. Thus, various companies are providing third-party risk management solutions. Such factors are expected to fuel the segment growth which in turn drive the market growth during the forecast period. 

Market Segmentation By Deployment

The primary reason for the adoption of on-premises third-party risk management is the high system security it offers in comparison with the public cloud offering. It also requires a robust IT infrastructure for deployment. Furthermore, organizations have more control over the system and data as the hardware and software are handled on their premises. Companies such as FIS, Bottomline Technologies, and SAP offer on-premises third-party risk management solutions and services. On-premises third-party risk management is mainly used by large organizations and institutes with a global presence to have more control and ownership over the performance of the hardware and software, as well as the data generated and stored within the software. These organizations, especially in the BFSI and healthcare industries, deal with critical business- and customer-related information that requires high security. These factors collectively contribute to the continued demand for on-premises third-party risk management solutions and, in turn, will boost the growth of the market during the forecast period.

Regional Overview

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North America is estimated to contribute 45% to the growth of the global market during the forecast period.  Technavio's analysts have provided extensive insight into the market forecast, detailing the regional market trends and drivers influencing the market's trajectory throughout the forecast period. This is due to the presence of a large number of organizations belonging to the BFSI, IT, healthcare, and other industries. Organizations belonging to these end-user industries are the major buyers of this threat management in this region, as it enables cash management, payments, financial instruments, accounting, banking, risk management, and hedge accounting. Moreover, this region has prominent banking and financial institutions such as Wells Fargo and Co. (Wells Fargo), The PNC Financial Services Group Inc. (The PNC Financial), Bank of America, JPMorgan Chase & Co. (JPMorgan), and Citigroup Inc. (Citi), which process multiple transactions yearly. For instance, Citi processes nine million transactions annually. 

In addition, various companies are focusing on adopting vendor risk management. Thus, vendors operating in the region are launching new risk management solutions. For instance, in January 2024, ProcessUnity announced the launch of an all-in-one risk management platform. Risk executives may now benefit from a positive transformation of their labour-intensive, static, and restricted coverage third-party risk management program to continuous monitoring and mitigation across the whole third-party ecosystem with a single unified solution. Thus, the growing demand for third-party risk management and the launch of new third-party risk management are anticipated to drive the growth of the market during the forecast period.

Market Customer Landscape

The market forecasting report includes the adoption lifecycle of the market research and growth, 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 and trends strategies.

Global Market Customer Landscape

Market Companies 

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.

Dell Technologies Inc. - The company offers RSA third party risk management solutions that employs a series of risk assessment questionnaires to be completed by a third party to assess the third party internal control environment and collect relevant supporting documentation for further analysis.

Market analysis and report of 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.

Segment Overview

The market research report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2018 to 2028. 

• Component Outlook
  • Solution
  • Service

• Deployment Outlook
  • Cloud
  • On-premises

• Region Outlook
  • North America
    • The U.S.
    • Canada
  • South America
    • Chile
    • Brazil
    • Argentina  
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa

Market Analyst Overview 

Third-Party Risk Management (TPRM) is paramount amid evolving compliance mandates, necessitating robust strategies. Organizations navigate challenges by assessing in-house competencies, fostering a resilient partner ecosystem, and implementing a transparent risk assessment process. Amid uncertainties, the compliance management segment becomes pivotal, addressing regulatory and reporting requirements to avert financial losses.

TPRM involves streamlining compliance-related tasks, aligning with regulations, policies, and obligations. By actively managing the component segment, businesses enhance their overall risk posture. In this dynamic landscape, TPRM emerges as a strategic imperative, safeguarding enterprises against potential threats and ensuring adherence to evolving regulatory landscapes. The emphasis on comprehensive TPRM underscores its role as a proactive and integral component of modern risk management frameworks.

Third-Party Risk Management 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, 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 report has not included the data that you are looking for, you can reach out to our analysts and get segments customized.

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What are the Key Data Covered in this Market Research Report?

• CAGR of the market report forecast during the forecast period
• Detailed information on factors that will drive the growth of the market  between 2024 and 2028
• Precise estimation of the market  size and its contribution of the market in focus to the parent market
• Accurate predictions about upcoming trends and changes in consumer behavior
• Growth of the market across North America, Europe, APAC, South America, and Middle East and Africa
• Thorough market analysis and report of the market’s competitive landscape and detailed information about companies
• Comprehensive analysis of factors that will challenge the growth of Industry companies

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