Market Size of Vendor Risk Management Industry
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 |
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 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 | ||||||||
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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 Size Summary
The vendor risk management market is experiencing significant growth, driven by the increasing reliance on third-party vendors across various sectors, including banking, finance, and healthcare. As organizations expand their outsourcing efforts, the need for robust vendor risk management (VRM) frameworks becomes critical to mitigate business uncertainties, legal liabilities, and reputational risks. The market is further propelled by rapidly changing regulations and the necessity for continuous monitoring and analysis of vendor performance. The COVID-19 pandemic highlighted the importance of efficient supply chain management and risk identification, accelerating the adoption of VRM solutions. Technological advancements in AI, machine learning, and cloud computing are also contributing to the market's expansion, offering organizations enhanced capabilities to manage and mitigate risks associated with third-party vendors.
Regionally, North America is a key player in the vendor risk management market, with companies focusing on reducing exposure to third-party incidents and adhering to stringent regulatory demands. The presence of major global businesses with extensive supply chains, such as Amazon and Walmart, provides opportunities for VRM solution providers to offer advanced functionalities. The market is semi-consolidated, with a few established players dominating due to their competitive edge and ability to adapt to rapidly changing technologies. New entrants face challenges due to the substantial initial investment required and the need to keep pace with technological advancements. Recent developments, such as the launch of cloud-based GRC solutions and AI-driven third-party management platforms, underscore the ongoing innovation and competitive dynamics within the market.
Vendor Risk Management Market Size - Table of Contents
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1. MARKET INSIGHTS
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1.1 Market Overview
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1.2 Industry Attractiveness - Porter's Five Forces Analysis
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1.2.1 Bargaining Power of Suppliers
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1.2.2 Bargaining Power of Buyers
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1.2.3 Threat of New Entrants
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1.2.4 Threat of Substitutes
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1.2.5 Intensity of Competitive Rivalry
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1.3 Assessment of Impact of COVID-19 on Vendor Risk Management Market
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2. MARKET SEGMENTATION
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2.1 By Type
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2.1.1 Solutions (Qualitative Analysis for Sub-Segments)
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2.1.1.1 Vendor Information Management
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2.1.1.2 Quality Assurance Management
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2.1.1.3 Financial Control
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2.1.1.4 Compliance Management
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2.1.1.5 Audit Management
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2.1.1.6 Contract Management and Others
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2.1.2 Services
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2.2 By Deployment Type
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2.2.1 On-Premises
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2.2.2 Cloud
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2.3 By Organization Size
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2.3.1 Small and Medium-Sized Enterprises
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2.3.2 Large Enterprises
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2.4 By Industry Vertical
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2.4.1 Banking, Financial Services, and Insurance
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2.4.2 Telecom and IT
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2.4.3 Manufacturing
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2.4.4 Government
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2.4.5 Healthcare
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2.4.6 Others (Energy and Utilities, Retail and Consumer Goods)
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2.5 Geography
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2.5.1 North America
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2.5.2 Europe
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2.5.3 Asia-Pacific
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2.5.4 Latin America
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2.5.5 Middle East and Africa
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Vendor Risk Management Market Size 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.