Third-Party Risk Management Market Size, Share, Industry, Forecast and outlook (2024-2031)

Global Third-Party Risk Management Market is estimated By Component(Solutions, Services), By Deployment Mode(Cloud, On-Premise), By Organization Size(Large, Small, and Medium), By End-User(Banking, Financial Services, Insurance, I.T. and Telecom, Healthcare and Life Science, Government, Aerospace and Defense, Retail and Consumer goods, Others), and by Region (North America, Latin America, Europe, Asia Pacific, Middle East, and Africa) – Share, Size, Outlook, and Opportunity Analysis, 2024-2031

Report Overview

The Global Third-Party Risk Management Market is estimated to reach at a CAGR of 17.8% during the forecast period (2024-2031). 

Third-party risk management (TPRM) is defined as a type of risk management that focuses on identifying and mitigating risks associated with third-party vendors (who are generally referred to as vendors, suppliers, partners, contractors, or service providers). The discipline is intended to help organizations understand the third parties, work with them, and their precautions. The scope and needs of a third-party risk management program vary greatly based on the industry, regulatory guidance, and other variables. Many of the best practices in third-party risk management are universal and may be used by any business or organization. While exact meanings differ, the word "third-party risk management" is frequently interchanged with other industry terminologies such as vendor risk management (VRM), vendor management, supplier risk management, and supply chain risk management. TPRM, on the other hand, is frequently viewed as an encompassing discipline.

Third-Party Risk Management Market Summary

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Third-Party Risk Management Market Dynamics

The security concerns associated with a pandemic constitute a significant market driver. However, the need for high financial investment is a market restraint.

Security Concerns

Concerns about the security of personal information are projected to drive demand in the global third-party risk management market. Increased third-party involvement in I.T. systems and data-sharing models has increased financial risks, contributing to the expansion of the worldwide third-party risk management industry. Businesses with third-party relationships with contractors and distributors are exposed to various hazards, and the need to manage such risks is expected to grow in the coming years.

The dependency of organizations on outdated technologies such as spreadsheets to support their third-party management program further enhances the need to adopt updated risk-management solutions, thereby driving the demand for third-party risk-management solutions even higher.

Mirato, an Israeli startup, has created an AI-driven third-party risk management solution platform to orchestrate and automate the third-party risk management lifecycle through monitoring, according to Finextra.

High financial requirement

Since effective third-party management requires extensive security and control, the utilization of advanced technologies such as artificial intelligence, and machine learning, among others, are widely utilized for third-party risk management, replacing the previously used spreadsheet system.

However, although the advent of technology helps properly manage third parties, the financial requirement for establishing sophisticated Third-Party management services and utilities tends to cause a considerable financial strain to organizations. Since such financial crunches prevent organizations from opting for third-party risk management services and solutions, the respective reason could be considered a significant market restraint for the global third-party risk management market.

COVID-19 Impact on Third-Party Risk Management Market

The pandemic of COVID-19 forced businesses to be more inventive and operate remotely. The coronavirus wreaked havoc on third-party supply chains, making it harder for vendors to provide services. Companies also have exhibited an understanding of the significance of remote or office data protection due to COVID-19. The mandatory shutdowns had a significant impact on exports from numerous countries. Cyber thieves continued to look for flaws in small environments, forcing businesses to manage risks better and adopt third-party risk management technologies.

The COVID-19 epidemic has had an extraordinary impact on the world economy. During the epidemic, supply chains became even more critical because it was impossible to ensure access and security measures. As more and more firms and industries work remotely, the demand for digital solutions has grown. Due to the necessity for more active and automated continuous oversight around the globe, the third-party management industry is predicted to increase significantly following the breakout of COVID-19.

Third-Party Risk Management Market Segmentation Analysis

The process safety services market is segmented into solutions and services based on components.

Solutions dominate the component segment of the third-party risk management market due to rising instances of outsourcing globally and extensive advancement in technologies.

Third-party risk management services have become the need of the day to integrate and manage various third-party resources utilized by players in every market segment. The solutions segment in third-party risk management is rising globally post-pandemic as the outsourcing of multiple tasks became common for manufacturers from varied industrial sectors to keep up with the market's volatility and increase the profit generation potential. Professional and managed services are the two prominently available solutions in the third-party risk management market. The respective services assist businesses by managing and assuring the flawless operation of third parties and their services associated with the organizations over time. The growth of cloud computing and increasing virtualization across industries are further driving the demand for solutions segments in several countries. Furthermore, deployments of solutions in third-party risk management are appropriate for dynamic business organizations with many suppliers, partners, and vendors.

Third-Party Risk Management Market Geographical Share

North America region accounts for the highest market share in the global third-party risk management market due to developed economies in the area.

The North American area dominates the global third-party risk management market, with a significant number of dominant players generating substantial revenue in the industry. Furthermore, mature economies like the U.S. and Canada help North America lead third-party risk management with the highest share. Additionally, because of its early adoption of third-party risk management solutions, the U.S. is a prominent market in the area. Increased regulatory pressure on businesses to effectively manage the risks associated with the supply chain fuels market expansion in the North American region. Due to the significant presence of providers and increased adoption of technical developments in the region-related third-party risk management solutions, the U.S. dominates the worldwide third-party risk management market.

The U.K. is Europe's second-largest market, with substantial growth in reliance on third parties to support core activities. Cyberattacks have increased dramatically in China, necessitating third-party risk management in the Asia-Pacific.

Third-Party Risk Management Companies and Competitive Landscape

The third-party risk management market is volatile, with several global conglomerates and extremely competitive small-scale players. Major market players' growth includes RSA Security LLC, MetricStream, KPMG International, Deloitte Touche Tohmatsu Limited, BitSight Technologies, Genpact Venminder, Inc., Resolver Inc., IBM Corporation, OneTrust, LLC, among others.

The significant players adopt several growth strategies such as product launches, acquisitions, and collaborations, contributing to the third-party risk management market's global growth.

For instance, in April 2021, HCL Technologies and ProcessUnity, Inc. announced that the two organizations would join hands to better each other. HCL Technologies will be able to use ProcessUnity's Vendor Risk Management platform to fuel its third-party risk-managed services program for its global clients due to this relationship. The respective factor enables companies to identify, manage, and proactively mitigate risks while implementing appropriate governance, risk, and compliance processes.

MetricStream:

Overview MetricStream provides Integrated Risk Management Solutions & Governance, Risk, and Compliance (GRC) and leverages the power of artificial intelligence to provide the most comprehensive solutions for enterprise and operational risk, regulatory compliance, internal audit, I.T., cyber risk, and third-party risk management on a single integrated platform.

Product Portfolio: The company's product portfolio of third-party risk management includes:

• Enterprise Risk Management: MetricStream enterprise risk management software allows businesses to take an organized and systematic approach to control organizational risks. The ERM system is supported by standardized risk assessment methodologies and standards, allowing organizations to identify threats accurately and obtain clear visibility into the critical hazards they face. The software utilizes multidimensional risk assessments based on multiple qualitative and quantitative indicators to determine an organization's risk profile. The software offers powerful analytics, enhanced heat maps, reports, dashboards, and infographics to provide real-time insights into risk management programs and a more efficient ERM strategy.

Key Development: In April 2021, MetricStream announced the release of Arno software that included various new features and enhancements to its platform and products. Internal Audit Management, Policy and Compliance Management, and Third-Party Risk Management solutions all received new features. The corporation set a new standard for governance, risk, and compliance and integrated risk management, allowing organizations to use risk as a strategic advantage even more.

Why Purchase the Report?

• Visualize the composition of the third-party risk management market segmentation by component, deployment model, organization size, end-user, and region, highlighting the key commercial assets and players.
• Identify commercial opportunities in the third-party risk management market by analyzing trends and co-development deals.
• Excel data sheet with thousands of third-party risk management market-level 4/5 segmentation data points.
• PDF report with the most relevant analysis cogently put together after exhaustive qualitative interviews and in-depth market study.
• Product mapping in excel for the key product of all major market players

The global third-party risk management market report would provide access to approx. 69 market data tables, 69 figures, and 180 pages.

Target Audience 2024

• Third-Party Risk Management Manufacturers/ Buyers
• Industry Investors/Investment Bankers
• Education & Research Institutes
• Research Professionals
• Emerging Companies
• Suppliers/Distributors