According to the research report, the global third-party risk management market was valued at USD 4.45 billion in 2021 and is expected to reach USD 14.33 billion by 2030, to grow at a CAGR of 14.8% during the forecast period.
Market Growth Drivers
Several factors contribute to the robust growth of the TPRM market:
- Cybersecurity Threats: The rise in cyberattacks targeting third-party vendors has underscored the need for comprehensive risk management strategies. Organizations recognize that vulnerabilities in their supply chain can lead to significant data breaches and financial losses.
- Regulatory Compliance: Stringent regulations, such as the General Data Protection Regulation (GDPR) and the Digital Operational Resilience Act (DORA), require businesses to implement effective risk management frameworks to ensure compliance and avoid penalties .
- Digital Transformation: As businesses undergo digital transformation, they increasingly rely on third-party services and technologies. This reliance amplifies the potential risks, necessitating robust TPRM solutions to safeguard operations.
- Supply Chain Complexity: Global supply chains involve multiple vendors across various regions, increasing the complexity of managing associated risks. TPRM solutions help organizations monitor and mitigate risks throughout the supply chain.
Key Trends in Third-Party Risk Management
- Integration of Artificial Intelligence (AI) and Machine Learning (ML): AI and ML technologies are being integrated into TPRM solutions to enhance risk assessment processes. These technologies enable predictive analytics, real-time monitoring, and automated threat detection, improving the efficiency and effectiveness of risk management strategies.
- Cloud-Based Deployment: The adoption of cloud-based TPRM solutions is on the rise due to their scalability, cost-effectiveness, and ease of integration with existing systems. Cloud platforms facilitate centralized risk management, allowing organizations to monitor third-party activities in real-time.
- Shift Towards Managed Services: Organizations are increasingly outsourcing their TPRM functions to managed service providers. This shift allows businesses to leverage specialized expertise, reduce operational costs, and focus on core competencies.
- Focus on Vendor Performance Management: Beyond risk mitigation, organizations are emphasizing the evaluation of vendor performance. This approach ensures that third-party relationships contribute positively to business objectives and deliver value.
Research Scope
The research into the TPRM market encompasses various dimensions:
- Component Analysis: Examining the different components of TPRM solutions, including software, services, and solutions, to understand their market share and growth potential.
- Deployment Models: Analyzing the adoption of cloud-based versus on-premises TPRM solutions to determine preferences and trends among organizations.
- End-User Industries: Investigating the application of TPRM solutions across various sectors such as Banking, Financial Services, and Insurance (BFSI), healthcare, retail, manufacturing, and energy & utilities.
- Geographical Insights: Assessing the adoption and growth of TPRM solutions in different regions, including North America, Europe, Asia-Pacific, and the Middle East & Africa.
Major Key Players:
- RSA
- Genpact
- MetricStream
- Deloitte
- KPMG
- Bit Sight Technologies
- Ernst & Young
- PwC
- Process Unity
- Ven minder
- Resolver
- NAVEX Global
𝐄𝐱𝐩𝐥𝐨𝐫𝐞 𝐓𝐡𝐞 𝐂𝐨𝐦𝐩𝐥𝐞𝐭𝐞 𝐂𝐨𝐦𝐩𝐫𝐞𝐡𝐞𝐧𝐬𝐢𝐯𝐞 𝐑𝐞𝐩𝐨𝐫𝐭 𝐇𝐞𝐫𝐞: https://www.polarismarketresearch.com/industry-analysis/third-party-risk-management-market
Market Segmentation
- By Component:
- Solutions: This segment includes software applications designed to assess, monitor, and mitigate third-party risks. Solutions often incorporate features like risk assessment tools, compliance management, and reporting capabilities.
- Services: Services encompass consulting, implementation, training, and support services that assist organizations in deploying and optimizing TPRM solutions.
- By Deployment Model:
- Cloud-Based: Cloud-based TPRM solutions offer scalability and flexibility, allowing organizations to manage risks across multiple vendors and geographies efficiently.
- On-Premises: On-premises solutions provide organizations with greater control over their risk management processes but may require significant investment in infrastructure and resources.
- By End-User Industry:
- BFSI: The BFSI sector is a major adopter of TPRM solutions due to the sensitive nature of financial data and stringent regulatory requirements.
- Healthcare: Healthcare organizations utilize TPRM solutions to protect patient data and comply with healthcare regulations.
- Retail: Retailers implement TPRM solutions to manage risks associated with their supply chains and ensure product quality.
- Manufacturing: Manufacturers use TPRM solutions to monitor supplier performance and mitigate operational risks.
- Energy & Utilities: This sector leverages TPRM solutions to manage risks related to infrastructure and regulatory compliance.
- By Organization Size:
- Large Enterprises: Large organizations often have complex supply chains and extensive third-party relationships, driving the demand for comprehensive TPRM solutions.
- Small and Medium Enterprises (SMEs): SMEs are increasingly adopting TPRM solutions to manage risks associated with their growing third-party engagements.
Regional Insights
- North America: Dominated the global TPRM market with a revenue share of over 38% in 2023. The region's growth is attributed to the presence of numerous large enterprises and financial institutions that face complex risk management challenges due to extensive third-party networks.
- Europe: Expected to witness significant growth due to increasing cyber threats and regulatory challenges. The implementation of regulations like GDPR has driven the demand for TPRM solutions in the region.
- Asia-Pacific: Anticipated to register rapid growth due to rapidly growing economies, expanding digital landscapes, and increasing regulatory focus. Businesses in this region are scaling and integrating more third-party services, prompting the adoption of effective risk management solutions.
Conclusion
The Third-Party Risk Management market is poised for substantial growth, driven by the increasing complexity of global supply chains, escalating cybersecurity threats, and stringent regulatory requirements. Organizations across various sectors are recognizing the importance of implementing robust TPRM strategies to safeguard their operations and maintain compliance. As the market continues to evolve, the integration of advanced technologies like AI and ML, along with the adoption of cloud-based solutions, will play a crucial role in shaping the future of third-party risk management.
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