Global Third Party Risk Management Market, By Component (Solutions and Services), Deployment Model (On-Premise and Cloud), Organization Size (Large Enterprises, Small and Medium-Sized Enterprises), End User (Government, Aerospace, and Defense, Banking, Financial Services, and Insurance, Manufacturing, IT and Telecom, Energy and Utilities, Retail and Consumer Goods, Healthcare and Life Sciences, and Others) – Industry Trends and Forecast to 2031.
Third-Party Risk Management Market Analysis and Size
The third-party risk management is experiencing substantial growth driven by the increasing complexity of business ecosystems and the rising number of cyber threats. Organizations are recognizing the need to assess and mitigate risks associated with their third-party relationships to ensure the security and compliance of their operations. This market is characterized by the adoption of advanced technologies such as AI and machine learning for risk assessment, coupled with a growing emphasis on regulatory compliance. The market players offer comprehensive solutions that encompass vendor risk assessment, continuous monitoring, and compliance management, catering to the evolving needs of businesses to proactively manage and mitigate risks arising from their extended network of third-party relationships. As businesses across various industries prioritize risk management, the global third-party risk management market is expected to expand in the coming years.
Data Bridge Market Research analyses that the global third party risk management market is expected to reach USD 25.83 billion in 2031 and from USD 6.69 billion by 2023, growing at a CAGR of 18.5% during the forecast period of 2024 to 2031.
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Report Metric
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Details
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Forecast Period
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2024 to 2031
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Base Year
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2023
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Historic Years
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2022 (Customizable 2016-2021)
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Quantitative Units
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Revenue in USD Billion
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Segments Covered
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Component (Solutions and Services), Deployment Model (On-Premise and Cloud), Organization Size (Large Enterprises, Small and Medium-Sized Enterprises), End User (Government, Aerospace, and Defense, Banking, Financial Services, and Insurance, Manufacturing, IT and Telecom, Energy and Utilities, Retail and Consumer Goods, Healthcare and Life Sciences, and Others)
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Regions Covered
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U.S., Canada and Mexico, Germany, France, U.K., Netherlands, Switzerland, Belgium, Russia, Italy, Spain, Turkey, Rest of Europe, China, Japan, India, South Korea, Singapore, Malaysia, Australia, Thailand, Indonesia, Philippines, Rest of Asia-Pacific, Saudi Arabia, U.A.E., South Africa, Egypt, Israel, Rest of Middle East and Africa, Brazil, Argentina, and Rest of South America
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Market Players Covered
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RSA Security LLC, MetricStream, KPMG International, Deloitte, BitSight Technologies, ProcessUnity, Inc., Genpact, Venminder, Inc., Resolver, Inc., NAVEX Global, Inc., SAI Global Compliance, Inc., Rapid Ratings International Inc., Optiv Security Inc., PwC, Aravo Solutions, Inc., OneTrust, LLC, Prevalent, Inc., MITRATECH, Ernst & Young Global Limited, IBM Corporation
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Market Definition
Third party risk management is identifying, assessing, and mitigating potential risks associated with external parties that a business collaborates with, aiming to safeguard its operations and protect sensitive information. Organizations are increasing their dependence on third parties for improved profitability, faster time to market, competitive advantage, and decreased costs. However, third-party relationships come with multiple risks that include strategic, operational, reputational, financial, transaction, compliance, and information security risks, among others.
Global Third-Party Risk Management Market Dynamics
This section deals with understanding the market drivers, advantages, opportunities, restraints, and challenges. All of this is discussed in detail below:
Drivers
- Surge in Cyberattacks and Ransomware
Digital fraudulent activities and cyber-attacks are the problems organizations and enterprises have faced since the advent of e-commerce about two decades ago. Accelerated digitalization, industrial revolutions, and increasingly complex business operations have given rise to many vulnerabilities in the system. Investments in information technology and vast network architectures have created an organization's web of co-functioning entities. Third-party vendors are one such entity. This has opened up many avenues for cyber-attacks or ransomware attacks. Organizations are generally more reliant on digital infrastructure nowadays than they were in the past, which has contributed to this recent surge of ransomware attacks.
- Increasing Dependence of Various Organizations on Third-Party Vendors
Third parties refer to vendors, suppliers, contractors, and others, enabling organizations to outsource certain raw materials, equipment, or services. Businesses are increasingly dependent on third parties to provide mission-critical services. This may include services related to information technology, finance and accounting, customer service support, and human resources administration, among others. Outsourcing has gone from being a value-protecting measure to becoming a value-creating measure.
Companies are increasingly dependent on the complex network of a third-party suppliers. This can be attributed to factors such as increasing competition on a global basis, growing in the market, reducing costs, increasing quality, and accelerating service delivery.
Opportunity
- ESG-Related Third Party Risk
Environmental, Social, and Governance (ESG) refers to a set of standards for a company operation that socially conscious investors use to screen potential investments. Investors increasingly apply these non-financial factors to their analysis process to identify material risks and growth opportunities. Social and climate issues are at the forefront globally, and the trend will continue in the future. The increasing focus of governments across the globe on these issues is resulting in changes in the policies and regulations regarding sustainability across financial and non-financial sectors. Third-party risk and resilience are the key issues debated by many business leaders amidst the constantly changing climate policies. Organizations and enterprises to align with climate policies to disclose sustainable company practices to investors.
Restraint/Challenge
- Constant Changes in Compliance Laws and Regulations
The rising adoption of digital technology, there has been an increase in the number of cyber-attacks and thefts in recent years. The regulatory bodies are constantly evolving the compliances and regulations concerning protecting user data rights. Despite growing regulatory expectations about how companies manage the risks posed by their relationships with third parties, most companies are still struggling to achieve some of the most basic requirements. The organization in the early stage of transformation by adopting risk management solutions finds it difficult to constantly change and widen the scope of regulatory expectation. In particular, the increased regulatory focus on cyber-risk, concentration risk, and fourth parties is not matched by most organizations’ ability to manage these emerging risks.
Recent Development
- In October 2023, Optiv Security Inc. achieved recognition as a Leader in the IDC MarketScape: Worldwide Cybersecurity Risk Management (CRM) Services 2023 Vendor Assessment. The assessment highlighted Optiv's comprehensive risk management services and proactive guidance in navigating the escalating cyber threat landscape. This acknowledgment in the respected IDC MarketScape contributed to the company's success by showcasing its expertise and effectiveness in helping clients achieve their business and risk management objectives
- In April 2021, MetricStream announced the launch of Arno software, including numerous features and innovations added to its platform and products. It also successfully added new capabilities to Internal Audit Management, Policy and Compliance Management, and Third-Party Risk Management products. With this the company was able to set a new standard for governance, risk and compliance and integrated risk management, further enabling organizations to leverage risk as a strategic advantage
Global Third-Party Risk Management Market Scope
The global third party risk management market is segmented on the basis of component, deployment model, organization size, and end user. The growth amongst these segments will help you analyze meager growth segments in the industries and provide the users with a valuable market overview and market insights to help them make strategic decisions for identifying core market applications.
Component
- Solutions
- Services
On the basis of component, the market is segmented into solutions and services.
Deployment Model
- On-Premise
- Cloud
On the basis of deployment model, the market is segmented into computer on-premise and cloud.
Organization Size
- Small and Medium-Sized Enterprises
- Large Enterprises
On the basis of organization size, the market is segmented into small and medium-sized enterprises and large enterprises.
End User
- Government, Aerospace and Defense
- Banking, Financial Services and Insurance
- Manufacturing
- IT and Telecom
- Energy and Utilities
- Retail and Consumer Goods
- Healthcare and Life Sciences
- Others
On the basis of end user, the market is segmented government, aerospace, and defence, banking, financial services, and insurance, manufacturing, IT and telecom, energy and utilities, retail and consumer goods, healthcare and life sciences and others.
Global Third-Party Risk Management Market Region Analysis/Insights
The global third party risk management market is segmented on the basis of component, deployment model, organization size, and end user.
The countries covered in the global third-party risk management market report are U.S., Canada and Mexico, Germany, France, U.K., Netherlands, Switzerland, Belgium, Russia, Italy, Spain, Turkey, rest of Europe, China, Japan, India, South Korea, Singapore, Malaysia, Australia, Thailand, Indonesia, Philippines, rest of Asia-Pacific, Saudi Arabia, U.A.E., South Africa, Egypt, Israel, rest of Middle East and Africa, Brazil, Argentina, and rest of South America.
North America region is expected to dominate the market due to its advanced regulatory frameworks, mature risk management practices, and a well-established ecosystem of technology and consulting firms specializing in this field. The U.S. is expected to dominate the market due to complex business landscape with numerous organizations engaging in extensive global supply chain networks. U.K. is expected to dominate in Europe due to strong understanding of the importance of managing risks associated with suppliers and other third parties within complex supply chains. China is expected to dominate in Asia-Pacific due to factors such as its booming economy with complex supply chains, increasing regulatory pressure on risk management, and a growing domestic market for these solutions.
The country section of the report also provides individual market-impacting factors and changes in market regulation that impact the current and future trends of the market. Data points like downstream and upstream value chain analysis, technical trends, and Porter’s five forces analysis, case studies are some of the pointers used to forecast the market scenario for individual regions. Also, the presence and availability of global brands and their challenges faced due to large or scarce competition from local and domestic brands, the impact of domestic tariffs, and trade routes are considered while providing forecast analysis of the region data.
Competitive Landscape and Global Third-Party Risk Management Market Share Analysis
The global third-party risk management market competitive landscape provides details of the competitor. Details included are company overview, company financials, revenue generated, market potential, investment in research and development, new market initiatives, global presence, production sites and facilities, production capacities, company strengths and weaknesses, product launch, product width and breadth, application dominance. The above data points provided are only related to the companies' focus related to the global third party risk management market.
Some of the major players operating in the global third party risk management market are RSA Security LLC, MetricStream, KPMG International, Deloitte, BitSight Technologies, ProcessUnity, Inc., Genpact, Venminder, Inc., Resolver, Inc., NAVEX Global, Inc., SAI Global Compliance, Inc., Rapid Ratings International Inc., Optiv Security Inc., PwC, Aravo Solutions, Inc., OneTrust, LLC, Prevalent, Inc., MITRATECH, Ernst & Young Global Limited, and IBM Corporation among others.
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