Third-party Risk Management Market: Mitigating Risks in a Post-Pandemic World
The third-party risk management market has witnessed significant growth in recent years, driven by the increasing reliance of organizations on third-party vendors and service providers. As businesses continue to outsource various functions to improve efficiency and reduce costs, the risk of data breaches, cyber-attacks, and compliance failures has increased. The COVID-19 pandemic has further accelerated this trend, with many organizations adopting remote work arrangements and relying more heavily on third-party vendors to maintain business continuity.
Market Outlook
The Third-party Risk Management Market is projected to grow at a compound annual growth rate (CAGR) of 15.8% from 2024 to 2030, reaching a market size of USD 24.25 billion by 2030. This growth can be attributed to the increasing need for organizations to mitigate risks associated with third-party relationships, including reputational damage, financial losses, and regulatory non-compliance.
Impact of COVID-19
The COVID-19 pandemic has had a significant impact on the third-party risk management market. With many organizations adopting remote work arrangements, the attack surface has increased, making it easier for cybercriminals to exploit vulnerabilities in third-party systems. Furthermore, the pandemic has led to an increase in phishing attacks, ransomware attacks, and other types of cyber-attacks, highlighting the need for robust third-party risk management practices.
In response to these challenges, organizations are increasingly investing in third-party risk management solutions to identify and mitigate risks associated with third-party relationships. This includes implementing robust due diligence processes, conducting regular risk assessments, and monitoring third-party vendors for potential risks.
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Major Market Players
The third-party risk management market is characterized by the presence of several major players, including:
- Cisco Systems (US)
- Deloitte (US)
- KPMG (The Netherlands)
- Alyne GmbH (Germany)
- Prevalent Inc (US)
- BitSight (US)
- OneTrust (US)
- Aravo Solutions Inc (US)
These players offer a range of solutions and services designed to help organizations manage third-party risks effectively. This includes risk assessment tools, due diligence platforms, and compliance software.
Market Segmentation
The third-party risk management market can be segmented based on component, deployment mode, organization size, industry vertical, and region.
- By component, the market can be segmented into software and services.
- By deployment mode, the market can be segmented into cloud-based and on-premise deployment.
- By organization size, the market can be segmented into small and medium-sized enterprises (SMEs) and large enterprises.
- By industry vertical, the market can be segmented into banking, financial services and insurance (BFSI), healthcare, retail, and others.
- By region, the market can be segmented into North America, Europe, Asia-Pacific, Middle East and Africa (MEA), and Latin America.
Top Impacting Factors
Several factors are driving the growth of the third-party risk management market. Some of the top impacting factors include:
- Increasing reliance on third-party vendors: Organizations are increasingly relying on third-party vendors to improve efficiency and reduce costs. This has led to an increase in third-party risks, including data breaches and cyber-attacks.
- Growing need for compliance: Organizations must comply with various regulations and standards, including GDPR, HIPAA, and PCI-DSS. Third-party risk management solutions help organizations ensure compliance with these regulations.
- Rise of digital transformation: Digital transformation initiatives have led to an increase in third-party risks, including cyber-attacks and data breaches.
- Increasing awareness of third-party risks: Organizations are increasingly aware of the risks associated with third-party relationships and are investing in solutions to mitigate these risks.
Latest Industry News
Some of the latest industry news related to the third-party risk management market includes:
- In June 2022, MetricStream launched its Third-Party Risk Management solution, designed to help organizations identify and mitigate risks associated with third-party relationships.
- In May 2022, RSA Security announced its partnership with Deloitte to offer a comprehensive third-party risk management solution to clients.
- In April 2022, SAP SE launched its SAP Third-Party Governance solution, designed to help organizations manage third-party risks effectively.
The third-party risk management market is expected to witness significant growth in the coming years, driven by the increasing need for organizations to mitigate risks associated with third-party relationships. As organizations continue to rely on third-party vendors to improve efficiency and reduce costs, the importance of effective third-party risk management practices will only continue to grow.
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