New York, June 29, 2023 (GLOBE NEWSWIRE) -- The global vendor risk management market is estimated to grow at a CAGR of ~17.6% from 2023 to 2035. The market is estimated to garner a revenue of nearly USD 52 billion by the end of 2035, up from a revenue of about USD 8 billion in the year 2022. Regulatory bodies across industries have established stringent data protection and privacy regulations, such as the General Data Protection Regulation (GDPR) and California Consumer Privacy Act (CCPA).
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Compliance with these regulations necessitates robust VRM practices. According to a survey in 2021, 74% of organizations cited regulatory compliance as the primary driver for their VRM programs. Organizations increasingly rely on third-party vendors for critical business operations and services. Any disruption or security breach in a vendor's operations can have a significant impact on the organization. The COVID-19 pandemic highlighted the vulnerabilities in global supply chains. Organizations recognized the importance of assessing and managing risks associated with their vendors and suppliers to ensure continuity of operations.
Vendor Risk Management Market: Key Takeaways
- Market in North America to propel the highest growth
- The cloud segment to garner the highest growth
- Market in Europe to grow at a highest rate
Increasing Demand to Streamline Vendor Risk Processing across the Globe to Boost Market Growth
If it is needed to determine the business and the level of risk and exposure, one must understand the tools, methods, and procedures that a vendor uses. This is done using a special type of supplier assessment, the so-called supplier risk assessment. As supply chains become more complex, these third-party risks increase, creating a need to streamline and monitor the supplier risk assessment process.
Seventeen percent of organizations reported a major incident involving third-party risk, up from 11% in the 2020 study. According to the Latest Annual Data for Data Breach report, data breaches cost ⁓3 million US dollars in India. SMBs focus on supplier risk management for data security by growing their suppliers and businesses. This boom is expected to continue during the forecast period. An increasing number of third-party risk management solution providers in large organizations are expected to drive market growth. It is estimated that this will drive the market for the forecast years to come.
Vendor Risk Management Market: Regional Overview
The global vendor risk management market is segmented into five major regions including North America, Europe, Asia Pacific, Latin America, and the Middle East and Africa region.
Increasing security breaches to Drive Market Growth in North America Region
The vendor risk management market in the North American region is estimated to garner the largest revenue by the end of 2035. The regional market growth can be mainly attributed to increasing security gaps due to the increasing number of independent providers within smaller or larger organizations. For example, research shows that at the largest banks in the US, about 1.5 million customers were affected by a major data breach.
On March 5, 2020, the Office of the Comptroller of the Currency (OCC), a US-based government agency, published an addendum to third-party guidance on managing relationship risk for specific categories of stakeholders such as contractors, cloud service providers and data aggregators, and Fintech Company. The BFSI sector is expected to see increased demand for VRM solutions. Additionally, market revenue growth in this region is expected to be supported by the growing need for monitoring and analysis of vendor performance. All these factors are expected to boost the growth of the market over the forecast period.
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Growing Adoption of government regulatory frameworks to Propel Growth in the Europe Region
The Europe vendor risk management market is estimated to garner the highest CAGR by the end of 2035. The growth of the market is mainly attributed to the increasing trend of adopting risk management solutions in financial institutions, especially in countries like the UK and Germany. There is increasing adoption of government regulatory frameworks in several sectors. For example, in June 2022, Marsh, a global professional services firm, unveiled its Cyber Incident Management (CIM) service, which will help clients based in the UK and Europe prepare for, respond to, and respond to cyber-attacks and recover from them Increase their cyber resilience.
Moreover, the increasing reliance on various third-party organizations and the introduction of advanced technologies in this region are also expected to drive market growth over the forecast period. Europe faces a growing number of cyber threats, including ransomware attacks, data breaches, and advanced persistent threats. The need to protect sensitive data and ensure cybersecurity resilience drives organizations in Europe to prioritize VRM practices and invest in solutions that mitigate vendor-related risks.
Vendor Risk Management Segmentation by Deployment Mode
- Cloud
- On- Premises
Amongst these two segments, the cloud segment is anticipated to hold the largest share over the forecast period. The growth of the segment is attributed to the availability of flexible, affordable, and scalable cloud-based VRM systems. The dominance of IT outsourcing to the cloud has increased the importance of VRM.
Some companies outsource most of their work processes, which means they no longer have control over it and need to trust the contractor to do a good job. Collaboration efficiency, reduced costs associated with managing and maintaining IT systems, sustainability through upgrades, and quality control are other key benefits of cloud computing. Recently, many companies have started offering cloud-based VRM solutions and this is expected to fuel the growth of the market in the years to come. For instance, Aravo, a US-based provider of risk management software, offers industry-leading, award-winning cloud-based third-party governance, risk, compliance, and performance management solutions.
Vendor Risk Management Segmentation by End User
- BFSI
- Telecom
- Manufacturing
Amongst these three segments, the BFSI segment is anticipated to hold a significant share over the forecast period. Owed to the rapid growth of third-party integration, connected devices, online banking, and the demand for fast transactions, the BFSI industry is a highly connected sector. Increasing connectivity raises more concerns about cybersecurity. Because affiliated companies are almost always associated with new entities, there is a strong need for vendor risk management and potential cybersecurity risk in this industry.
The Financial Services Information Sharing and Analysis Center (FS-ISAC) predicts that by 2022 there will be an increase in cyberattacks targeting financial institutions. The Institute predicts that the top cyber threats facing financial institutions in 2022 will continue to be third-party risks, zero-day vulnerabilities, and ransomware. As a result, this is expected to create numerous opportunities for segment growth in the coming years.
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Vendor Risk Management Segmentation by Type
- Solution
- Services
Vendor Risk Management Segmentation by Organization Size
- Small & Medium-Sized Enterprises
- Large Enterprises
A few of the well-known market leaders in the global vendor risk management market that are profiled by Research Nester are BitSight Technologies, Inc., Genpact, MetricStream, SAI Global, IBM Corporation, Rapid Ratings International Inc., ProcessUnity, Inc., LogicManager, Inc., Aravo Solutions, Inc., ACL Services Ltd., and other key market players.
Recent Development in the Market
- IBM recently signed an agreement with Siam Commercial Bank, a Thailand-based financial services provider, to increase the security of countless digital transactions on its platform and better serve its customers. The goal of this collaboration is to leverage IBM's core competency in delivering a secure and resilient enterprise platform for mission-critical applications and data across hybrid multi-clouds to mitigate risk and reduce fraudulent activity in financial transactions.
- ProcessUnity, a US-based software company, issued a statement announcing that Forrester has positioned itself as a leader in Forrester Wave's third-party risk management platforms.
About Research Nester
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