Vendor Risk Management Market Size, Trends & Share Analysis, 2035

Global Vendor Risk Management Market Size, Forecast, and Trend Highlights Over 2023 - 2035

Vendor Risk Management Market size is estimated to reach ~USD 52 Billion by the end of 2035 by growing at a CAGR of ~17.60% over the forecast period, i.e., 2023 – 2035. In addition to this, in the year 2022, the market size of vendor risk management was ~USD 8 Billion. The growth of the market can be attributed to the increasing number of third-party vendors in large and small & medium sized enterprises and the increasing need to constantly monitor vendor performance. Many large enterprises have found that their systems and processes relating to the VRM are not adequate from a purely business point of view, which may result in substantial damages as a result of an inadequate vendor risk management framework. It is expected that supply chains with any third parties and service providers will become an important source of risks for manufacturers augmenting the need for vendor risk management solutions. For instance, Toyota recalled nearly 2.9 million vehicles in January 2020, including 2011-2019 Corollas, 2011, -2013 Matrixes, 2012-2018 AUVs, and 2013-2018 Avalon hybrids due to a defect affecting airbags and seatbelts. All these factors are predicted to boost the growth of the market in the forecast period.

In addition to these, factors that are believed to fuel the market growth of vendor risk management drugs include the rise in government initiatives and enforcement by agencies such as the Comptroller of the Currency (OCC), the Health Insurance Portability and Accountability Act (HIPAA), the Consumer Financial Protection Bureau (CFPB) to set up a robust VRM framework. These factors are also anticipated to contribute to the market growth in the forecast period.

Global Vendor Risk Management Market: Growth Drivers and Challenges

Growth Drivers

Growing Demand for Efficient Management of Vendor Ecosystems –Vendor risk management tools are useful when a company relies on several different suppliers because they help pinpoint the major problems that arise while buying goods and services from outside suppliers. A vendor risk management system makes it easier for the enterprise to evaluate the risks and helps in improving productivity and reducing costs. In 2020, over 40% of businesses had cutting down the budget as their major agenda.
Increasing Need to Streamline Vendor Risk Assessment Processing – To determine your business and its level of risk and exposure, you must understand the tools, methods, and procedures that a vendor employs. This is done through a special sort of vendor review called a vendor risk assessment. With supply chains becoming more complex, these third-party risks are expanding, hence the need to optimize and monitor vendor risk assessment processing. A high-impact third-party risk incident was reported by 17% of firms, up from 11% in the 2020 study.
Rising Demand for VRM solutions by SMEs – According to the most recent Annual Data for Data Breach report, the data breach costs ⁓USD 3 million in India. SMEs are focusing on vendor risk management for data security by increasing their party vendors and businesses. It is predicted that this boom would continue over the forecast period.
Increasing Number of Third-Party Providers in Large Organizations – An increasing number of third-party risk management solutions providers in large organizations, is anticipated to drive the market growth. It was discovered that the third-party risk management market size is growing at a CAGR of 17% in the forecast period of 2020-2027. This is estimated to boost the market in the coming years.
Increasing Investments Made to the Vendor Risk Management Solutions- According to reports, 90% of investment institutions in the US, Canada, UK are looking towards investment opportunities in vendor risk management and security, to relieve internal personnel and increase productivity.

Challenges

High dependence of organization on manual processes - Many organizations still rely on manual processes to evaluate any risks associated with vendors and dependency. The reluctance in accepting vendor risk management solution software is one of the major factors predicted to slow down the market growth.
Lack of outsourcing of VRM solutions in highly regulated industries
Unaware of the significance of Vendor Risk

Global Vendor Risk Management Market Segmentation

The global vendor risk management market is segmented and analyzed for demand and supply by deployment mode into the cloud and on-premises. Out of the two types of vendor risk management, the cloud segment is estimated to gain the largest market share of about ~34% in the year 2035. The growth of the segment can be attributed to the availability of flexible, affordable, and scalable cloud-based VRM systems. The prevalence of outsourcing information technology to the cloud has increased the importance of VRM. Some companies outsource most of their workflows, which means they no longer have control over them and must rely on the contractor to do a decent job. The efficacy of cooperation, decreased costs associated with managing and maintaining IT systems, sustainability through upgrades, and quality control are further key benefits of cloud computing. In recent times, numerous businesses have started to provide cloud-based VRM solutions and this is predicted to boost market growth in the coming years. For instance, Aravo, a risk management software provider based in the United States provides award-winning, industry-leading cloud-based solutions to manage third-party governance, risk, compliance, and performance.

The global vendor risk management market is also segmented and analyzed for demand and supply by end-user into BFSI, telecom, and manufacturing. Amongst these three segments, the BFSI pharmacies segment is expected to garner a significant share in the year 2035. Due to the quickly growing third-party integration, linked devices, online banking, and demand for quick transactions, the BFSI industry is a highly interconnected sector. Increasing interconnection raises more issues about cybersecurity. As connected businesses are almost always connected to new entities, there is a strong demand for vendor risk management in this industry and a potential cybersecurity risk. Financial Services Information Sharing and Analysis Center (FS-ISAC) predicts that in 2022, there will be an increase in cyberattacks on financial institutions. The institution predicts that the most significant cyber dangers to financial institutions in 2022 will continue to be a third-party risk, zero-day vulnerability, and ransomware. This, as a result, is anticipated to create numerous opportunities for the growth of the segment in the coming years.

Our in-depth analysis of the global vendor risk management market includes the following segments:

By Type	Solution Services
By Deployment Mode	Cloud On- Premises
By End User	BFSI Telecom Manufacturing
By Organization Size	Small & Medium Sized Enterprises Large Enterprises

Global Vendor Risk Management Market Regional Synopsis

The market share of vendor risk management in North America, amongst the market in all the other regions, is projected to be the largest with a share of about ~32% by the end of 2035. The growth of the market can be attributed majorly to the increasing security breaches due to the increased number of independent vendors within smaller or larger organizations. For instance, research shows that at the largest banks in the U.S., approximately 1.5 million customers were affected by a major data breach. On 05 March 2020, the Office of the Comptroller of the Currency (OCC), a U.S.-based government agency released a supplement to third-party Guidance on the management of relationships risks for specific categories of stakeholders, such as contractors, Cloud Service Providers, Data Aggregators, and Financial Technology Firms. The BFSI sector is expected to see a higher demand for VRM solutions. Moreover, the revenue growth of the market in this region is expected to be supported by the increasing need to monitor and analyze the performance of the suppliers. All these factors are anticipated to boost the market growth in the forecast period.

The European vendor risk management market is estimated to be the second largest, registering a significant share by the end of 2035. The growth of the market can be attributed majorly to the growing trend towards adopting risk management solutions within financial institutions, especially in countries such as the United Kingdom and Germany. There is an increased government regulatory framework adoption in multiple sectors. For instance, on June 2022, Marsh, a global professional services firm introduced its Cyber Incident Management (CIM) service, which will assist clients based in the UK and Europe in preparing, responding, and recovering from cyber-attacks, as well as increasing their cyber resilience. In addition, the increasing reliance of different organizations on third-party vendors and the adoption of advanced technologies in this region, are also anticipated to boost the market growth during the forecast period.

Further, the market in the Asia Pacific, amongst the market in all the other regions, is projected to hold a majority of the share by the end of 2035. The growth of the market can be attributed majorly to the growing demand for third-party vendors within small and large organizations, increased emphasis on digitalization, and rapid industrial development. In addition, the growing incidence of security and cyber-attacks throughout the region is also expected to boost the growth of the market. In research, Asia was identified as the most targeted region for cyber-attacks in 2021. With cyber-attacks becoming a major concern, demand for network security and virtual real estate management solutions across the region is high.

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Top Featured Companies Dominating the Global Vendor Risk Management Market

BitSight Technologies, Inc.
- Company Overview
- Business Strategy
- Key Product Offerings
- Financial Performance
- Key Performance Indicators
- Risk Analysis
- Recent Development
- Regional Presence
- SWOT Analysis
Genpact
MetricStream
SAI Global
IBM Corporation
Rapid Ratings International Inc.
ProcessUnity, Inc.
LogicManager, Inc.
Aravo Solutions, Inc.
ACL Services Ltd.

In The News

IBM recently signed an agreement with Siam Commercial Bank, a Thailand-based financial services provider, to improve the security of countless digital transactions on its platform and to provide better service to its customers. This collaboration aims to capitalize on IBM's key expertise in providing a secure, resilient enterprise platform for mission-critical apps and data on hybrid multi-cloud to mitigate risks and reduce fraudulent activity in financial transactions.
ProcessUnity, a U.S based software company released a statement announcing that Forrester has positioned it as a leader in the Forrester Wave Third-Party Risk Management Platforms.

Global Economic Impact

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Despite Inflation & Fearing Recession, Businesses Across the Globe Expected to Do Better in 2023:

In 2023, market players might incur losses due to huge gap in currency translation followed by contracting revenues, shrinking profit margins & cost pressure on logistics and supply chain.
Controlling Inflation has become the first priority for global economies from last quarter of 2022 and to be followed in 2023. With skewed economic situations, rise in interest rate by governments to control spending and inflation, spiked oil and gas prices, high inflation, geo-political issues including U.S. & China trade war, Russia-Ukraine conflict to intensify the global economic issues.
The interest rates in the U.S. may be less sensitive in 2023 as compared to 2022; sigh of relief for businesses. Positive business sentiments, healthy business balance sheets, growth in construction spending (private construction value in 2022 stood at $1,429.2 billion, 11.7 percent (±1.0 percent) above the $1,279.5 billion spent in 2021, Residential construction in 2022 was $899.1 billion, up by 13.3 percent (±2.1 percent) from $793.7 billion in 2021, non-residential construction touched $530.1 billion, 9.1 percent (±1.0 percent) above the $485.8 billion in 2021.) showcases minimal impact of recession in the country.
Similarly, spiked spending in the European and major Asia economics including, India, China & Japan to showcase less impact on the global demand.

Key Questions Answered in the Report

1) What are the major factors driving the growth of the vendor risk management market?

Ans: Increasing need for efficient management of vendor ecosystems, increasing third-party providers in organizations, and demand to streamline risk management processing are the major factors driving the market growth.

2) What would be the CAGR of vendor risk management market over the forecast period?

Ans: The market size of vendor risk management is anticipated to attain a CAGR of ~17.60% over the forecast period, i.e., 2023 – 2035.

3) What are the challenges affecting the vendor risk management market growth?

Ans: Lack of awareness regarding vendor risk management solutions, and over-dependence of organizations on manual processes, are estimated to be the growth hindering factors for the market expansion.

4) Which region will provide more business opportunities for growth of vendor risk management market in future?

Ans: The market in the North American region is projected to hold the largest market share by the end of 2035 and provide more business opportunities in the future.

5) Who are the major players dominating the vendor risk management market?

Ans: The major players in the market are BitSight Technologies, Inc., Genpact, MetricStream, SAI Global, IBM Corporation, Rapid Ratings International Inc., ProcessUnity, Inc., LogicManager, Inc., Aravo Solutions, Inc., and ACL Services Ltd.

6) How are the company profiles selected?

Ans: The company profiles are selected based on the revenues generated from the product segment, the geographical presence of the company which determines the revenue generating capacity as well as the new products being launched into the market by the company.

7) What are the segments in the vendor risk management market?

Ans: The market is segmented by type, product, end user, and by region.

8) Which segment captures the largest market size in the deployment mode segment in the vendor risk management market?

Ans: The cloud segment is anticipated to garner the largest market size by the end of 2035 and display significant growth opportunities.

Base Year	2022
Forecast Year	2023-2034
CAGR	~17.60%
Base Year Market Size (2022)	~ USD 8 Billion
Forecast Year Market Size (2035)	~ USD 52 Billion
Regional Scope	North America (U.S., and Canada) Latin America (Mexico, Argentina, Rest of Latin America) Asia-Pacific (Japan, China, India, Indonesia, Malaysia, Australia, Rest of Asia-Pacific) Europe (U.K., Germany, France, Italy, Spain, Russia, NORDIC, Rest of Europe) Middle East and Africa (Israel, GCC North Africa, South Africa, Rest of the Middle East and Africa)