Vendor Risk Management Market Size
| Study Period | 2019 - 2029 |
| Market Size (2024) | USD 11.98 Billion |
| Market Size (2029) | USD 21.59 Billion |
| CAGR (2024 - 2029) | 12.50 % |
| Fastest Growing Market | North America |
| Largest Market | Asia Pacific |
Major Players
*Disclaimer: Major Players sorted in no particular order |
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Vendor Risk Management Market Analysis
The Vendor Risk Management Market size is estimated at USD 11.98 billion in 2024, and is expected to reach USD 21.59 billion by 2029, growing at a CAGR of greater than 12.5% during the forecast period (2024-2029).
The increasing number of third-party vendors in large as well as in small and medium enterprises, rapidly changing regulations across different regions, and the need to continuously monitor and analyze vendor performance are some of the factors responsible for the growing demand for vendor risk management.
- Vendor risk management programs have an exhaustive plan for identifying and mitigating business uncertainties, legal liabilities, and reputational harm. As companies increase their use of outsourcing, VRM and third-party risk management evolve into an increasingly essential part of any enterprise risk management framework. A vendor risk program can enable organizations to observe supplier relationships over time, identify new risks, and measure supplier performance.
- Many extensive businesses are discovering that their systems and procedures related to VRM need to be revised from a purely business standpoint. They might have to pay substantial damages due to inadequate vendor risk management framework. For instance, an average of 30,000 different parts is required to create a single vehicle, increasing the complex processes and supply chain coordination necessary to manufacture automobiles globally. The supply chains, with numerous third-party manufacturers and service providers, contain a significant source of risk for manufacturers in a domino effect, which, in turn, is expected to increase the need for vendor risk management.
- In July 2023, AuditBoard launched its new IT risk management offering, AuditBoard ITRM, a purpose-built solution for CISOs and their teams. AuditBoard ITRM is designed to enable collaboration between IT security and other organizational functions to accelerate the identification and classification of IT systems, perform business impact assessments, and remediate identified issues, according to AuditBoard.
- Moreover, various laws and agencies such as the Office of the Comptroller of the Currency (OCC), the Health Insurance Portability and Accountability Act (HIPAA), the Consumer Financial Protection Bureau (CFPB), the Foreign Corrupt Practices Act (FCPA), Dodd-Frank, the HITECH Act, and the Gramm-Leach-Bliley Act require enterprises to set up a robust VRM framework, driving the end-user to adopt these solutions.
- The spread of the COVID-19 pandemic emphasized the need for solutions that would help organizations efficiently manage supply chains, identify critical suppliers, and omit any risks that are expected to augment the growth of vendor risk management solutions across various industries. The increased adoption of the cloud and the need for real-time analytics are expected to proliferate the market growth.
Vendor Risk Management Market Trends
BFSI is Expected to Witness Significant Growth
- The Banking sector is, by the nature of its business, a highly interconnected sector owing to rapidly growing third-party integration, increasing connected devices, online banking, and the need for faster transactions. Greater interconnectivity introduces higher cybersecurity risks, given that there are too many things to secure and monitor. The interconnected entities are likely connected to new entities, which could also be the source of cybersecurity risk.
- Third-party vendors can often pose some serious cybersecurity risks to outsourcing banks, such as financial/reputational damage, regulatory problems, operational disruptions, etc. For instance, Australian P&N Bank recently sent its customers a notification letter about a data breach that put the personal and sensitive account information of customers at risk. The bank stated that the breach occurred through its customer relationship management (CRM) platform operated by a third-party hosting firm. The information exposed included name, address, and contact details, e.g., email, phone number, customer number, age, account number, and account balance.
- In November 2023, True Digital Group strategically collaborated with FiscalNote Holdings, Inc., an AI-driven enterprise SaaS technology provider of policy and global intelligence, to map 3rd and 4th party vendors and monitor critical risks, presenting an opportunity for financial institutions to understand and monitor risks within their expansive supplier networks and elevate transparency throughout the vendor ecosystem.
- The IT department, data protection concerns, and the dangers of exchanging data with third parties may be the emphasis in the banking industry. Risks to product quality and safety may be the emphasis in the consumer products industry, with a goal of protecting both end consumers and the brand's reputation. Although organizations have been right to be proactive in managing risks to specific functions or aspects of the business, many haven't stepped back from this focused perspective to examine the broader business exposure, the holistic view that's essential to understanding overall risk exposure resulting from third parties and managing it enterprise-wide.
- The need for vendor risk management for compliance management, vendor information management, and financial control is rapidly increasing in the BFSI industry due to greater exposure and continuously changing regulations. For instance, the guidance provided by the Office of the Comptroller of the Currency (OCC) addresses specific types of third parties, such as cloud service providers, data aggregators, fintech companies, and subcontractors, and how regulations to follow while conducting business with these providers.
North America is Expected to Hold Major Share
- The vendor risk management market in the region is proliferating owing to advanced technological developments in the field of AI, machine learning, cloud, and IoT, growth of end-user industries such as BFSI, healthcare, and others, increasing levels of investments, and a growing emphasis on data security.
- In North America, extended enterprise risk management is a primary concern for companies as they work to reduce their exposure to third-party incidents and safeguard their brand in the market due to rising regulatory demands, compliance-related punishments, and heightened scrutiny regarding third parties. By creating an integrated enterprise technology infrastructure and following well-defined procedures, businesses are improving risk management and making use of their partnerships with third parties to generate value throughout the entire organization.
- Further, in June 2023, The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency, the major regulating agencies in the United States, issued final guidelines to help banks manage risks associated with their third-party relationships. The guidance provides principles for effective third-party risk management for all types of relationships, regardless of how they may be structured.
- Moreover, the region is home to numerous major business players who have supply chains spread on an international level, such as Amazon and Walmart, among others. Thus, the vendor risk management players have the opportunity to penetrate further in the region by offering advanced functionalities with the help of AI and machine learning.
Vendor Risk Management Industry Overview
The market for vendor risk management is semi-consolidated as few established players in the market have gained the majority of the market share and thus are highly competitive. The huge initial investment and capability to cope with the rapidly changing technology have made it difficult for new vendors to enter the market.
- November 2023 - Mertic Stream has announced a cloud GRC solution powered by MetricStream CyberGRC and AWS Audit Manager from Amazon Web Services (AWS), MetricStream’s new cloud GRC solution is designed to provide customers with the ability to centrally manage risks, compliance standards, frameworks, and controls, and provides automated evidence gathering and assessments across on-premises and AWS environments.
- August 2022 - The most recent version of Prevalent, Inc.'s Third-Party Risk Management Platform was launched. Automated document analysis and customized dashboards are introduced in version 3.28 to expedite and streamline vendor management throughout the third-party lifecycle and the examination of supporting documentation.
Vendor Risk Management Market Leaders
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RSA Security LLC
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IBM Corporation
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Genpact Limited
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LockPath
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SAI Global
*Disclaimer: Major Players sorted in no particular order
Vendor Risk Management Market News
- September 2023 - Certa, a third-party management platform, has raised USD 35 million to invest in artificial intelligence that takes text-based policies around everything from ESG and legal to compliance and procurement and converts them into controlled workflows that integrate with third-party tools. Using artificial intelligence will allow customers to reduce the size of their vendor management team and onboard third-party providers more quickly.
- May 2023 - Vanta, a SaaS-based security and compliance solution provider, launched a Vendor Risk Management (VRM) offering focused on helping customers streamline third-party security with automated workflows for vendor security reviews and compliance. It is designed to combine the entire vendor management process within a single, automated workflow with necessary integrations with third-party applications, identity providers, and database systems.
Vendor Risk Management Market Report - Table of Contents
1. INTRODUCTION
- 1.1 Study Assumptions and Market Definition
- 1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET INSIGHTS
- 4.1 Market Overview
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4.2 Industry Attractiveness - Porter's Five Forces Analysis
- 4.2.1 Bargaining Power of Suppliers
- 4.2.2 Bargaining Power of Buyers
- 4.2.3 Threat of New Entrants
- 4.2.4 Threat of Substitutes
- 4.2.5 Intensity of Competitive Rivalry
- 4.3 Assessment of Impact of COVID-19 on Vendor Risk Management Market
5. MARKET DYNAMICS
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5.1 Market Drivers
- 5.1.1 Need for the Efficient Management of Complex Vendor Ecosystems
- 5.1.2 View the Risk Levels Associated With Various Tasks
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5.2 Market Restraints
- 5.2.1 Dependence on Non-Formal and Manual Processes By Many Organizations
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5.3 Market Challenge
- 5.3.1 Solution Integration With Existing Applications
6. MARKET SEGMENTATION
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6.1 By Type
- 6.1.1 Solutions (Qualitative Analysis for Sub-Segments)
- 6.1.1.1 Vendor Information Management
- 6.1.1.2 Quality Assurance Management
- 6.1.1.3 Financial Control
- 6.1.1.4 Compliance Management
- 6.1.1.5 Audit Management
- 6.1.1.6 Contract Management and Others
- 6.1.2 Services
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6.2 By Deployment Type
- 6.2.1 On-Premises
- 6.2.2 Cloud
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6.3 By Organization Size
- 6.3.1 Small and Medium-Sized Enterprises
- 6.3.2 Large Enterprises
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6.4 By Industry Vertical
- 6.4.1 Banking, Financial Services, and Insurance
- 6.4.2 Telecom and IT
- 6.4.3 Manufacturing
- 6.4.4 Government
- 6.4.5 Healthcare
- 6.4.6 Others (Energy and Utilities, Retail and Consumer Goods)
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6.5 Geography
- 6.5.1 North America
- 6.5.2 Europe
- 6.5.3 Asia-Pacific
- 6.5.4 Latin America
- 6.5.5 Middle East and Africa
7. COMPETITIVE LANDSCAPE
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7.1 Company Profiles
- 7.1.1 RSA Security LLC
- 7.1.2 Genpact Limited
- 7.1.3 LockPath
- 7.1.4 MetricStream
- 7.1.5 IBM Corporation
- 7.1.6 Resolver Inc.
- 7.1.7 SAI Global
- 7.1.8 Rapid Ratings International Inc.
- 7.1.9 Quantivate
- 7.1.10 Optiv Security, Inc.
- *List Not Exhaustive
8. INVESTMENT ANALYSIS
9. FUTURE OF THE MARKET
Vendor Risk Management Industry Segmentation
Vendor Risk management focuses on the uncertainty, probability, and consequence of various threats to both a company’s bottom line and its ability to deliver goods and services on time. Risk management enables companies to prepare for unexpected risks resulting from third-party vendors and suppliers. VRM programs are concerned with ensuring third-party products, IT vendors, and service providers do not result in business disruption or financial and reputational damage.
The Vendor Risk Management Market is segmented into type (solution [vendor information management, quality assurance management, financial control, compliance management, audit management, and contract management], services), deployment mode (cloud, on-premises), organization size (small and medium-sized enterprises, large enterprises), end-user industry (banking, financial services, and insurance, telecom and IT, manufacturing, government, and healthcare) and geography (North America, Europe, Asia Pacific, Latin America, and Middle East and Africa). The report offers market forecasts and size in value (USD) for all the above segments.
| By Type | Solutions (Qualitative Analysis for Sub-Segments) | Vendor Information Management |
| Quality Assurance Management | ||
| Financial Control | ||
| Compliance Management | ||
| Audit Management | ||
| Contract Management and Others | ||
| By Type | Services | |
| By Deployment Type | On-Premises | |
| Cloud | ||
| By Organization Size | Small and Medium-Sized Enterprises | |
| Large Enterprises | ||
| By Industry Vertical | Banking, Financial Services, and Insurance | |
| Telecom and IT | ||
| Manufacturing | ||
| Government | ||
| Healthcare | ||
| Others (Energy and Utilities, Retail and Consumer Goods) | ||
| Geography | North America | |
| Europe | ||
| Asia-Pacific | ||
| Latin America | ||
| Middle East and Africa |
Vendor Risk Management Market Research FAQs
How big is the Vendor Risk Management Market?
The Vendor Risk Management Market size is expected to reach USD 11.98 billion in 2024 and grow at a CAGR of greater than 12.5% to reach USD 21.59 billion by 2029.
What is the current Vendor Risk Management Market size?
In 2024, the Vendor Risk Management Market size is expected to reach USD 11.98 billion.
Who are the key players in Vendor Risk Management Market?
RSA Security LLC, IBM Corporation, Genpact Limited, LockPath and SAI Global are the major companies operating in the Vendor Risk Management Market.
Which is the fastest growing region in Vendor Risk Management Market?
North America is estimated to grow at the highest CAGR over the forecast period (2024-2029).
Which region has the biggest share in Vendor Risk Management Market?
In 2024, the Asia Pacific accounts for the largest market share in Vendor Risk Management Market.
What years does this Vendor Risk Management Market cover, and what was the market size in 2023?
In 2023, the Vendor Risk Management Market size was estimated at USD 10.65 billion. The report covers the Vendor Risk Management Market historical market size for years: 2019, 2020, 2021, 2022 and 2023. The report also forecasts the Vendor Risk Management Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
Vendor Risk Management Industry Report
Statistics for the 2023 Vendor Risk Management market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Vendor Risk Management analysis includes a market forecast outlook to 2029 and historical overview. Get a sample of this industry analysis as a free report PDF download.
