The global Third Party Risk Management market is valued at USD 7,225.6 million in 2024. The industry was seen to have USD 6,400.0 million in 2023. The industry is projected to show a CAGR of 12.9% from 2024 to 2034. The business is set to surpass USD 24,311.6 million by the end of 2034.
The organization are focused on external vendors and partners for managing third-party risks and it becomes very crucial. The market is propelled due to the rising need for robust solutions to manage and mitigate risks associated with third-party relationships in different sectors such as BFSI, healthcare and IT.
The rising complexity of regulatory environments across industries such as GDPR in Europe and CCPA in California mandates are comprehensive risk assessments and due diligence for third-party engagements. The solution will offer automated compliance management tools that help for organizations to meet regulatory requirements efficiently.
Global Third Party Risk Management Market Assessment
| Attributes | Description |
|---|---|
| Historical Size, 2023 | USD 6,400.0 million |
| Estimated Size, 2024 | USD 7,225.6 million |
| Projected Size, 2034 | USD 24,311.6 million |
The businesses undertake digital transformation and they rely on third-party service providers for cloud services, IT solutions and outsourcing. The dependence for the need in advanced solutions to ensure the third-party engagements do not introduce vulnerabilities or compliance risks.
The rise in cyber threats the organizations are more vulnerable to risks originating from third-party vendors. The third-party risk management provides crucial capabilities such as continuous monitoring and real-time risk assessment to safeguard potential breaches that could originate from external partners.
North America holds dominating share in overall market due to more stringent regulatory requirements and a strong focus on cybersecurity. The presence of major solution providers is focused to supports the market. Also, the growing digital economy and increasing regulatory scrutiny are leading to higher adoption rates of third-party risk management solutions.
Countries such as India and Australia are seeing a rise in the use of tools to manage risks in their expanding business ecosystems.
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The below table presents the expected CAGR for the global Third Party Risk Management market over several semi-annual periods spanning from 2024 to 2034. This assessment outlines changes in the Third Party Risk Management industry and identify revenue trends, offering key decision makers an understanding about market performance throughout the year.
H1 represents first half of the year from January to June, H2 spans from July to December, which is the second half. In the first half (H1) of the year from 2023 to 2033, the business is predicted to surge at a CAGR of 12.6%, followed by a slightly higher growth rate of 13.3% in the second half (H2) of the same decade.
| Particular | Value CAGR |
|---|---|
| H1 | 12.6% (2023 to 2033) |
| H2 | 13.3% (2023 to 2033) |
| H1 | 12.5% (2024 to 2034) |
| H2 | 13.5% (2024 to 2034) |
Moving into the subsequent period, from H1 2024 to H2 2034, the CAGR is projected to decrease slightly to 12.5% in the first half and remain higher at 13.5% in the second half. In the first half (H1) the market witnessed a decrease of 10 BPS while in the second half (H2), the market witnessed an increase of 20 BPS.
Increasing regulatory requirements boosting the adoption of financial control management components to ensure compliance and mitigate financial risks
The regulations are designed for ensuring that the organizations are maintaining robust financial controls particularly when engaging with third-party vendors. The rising adoption of financial control management components within TPRM solutions is rolling out.
The component plays a key vital role for ensuring compliance with regulations such as USA Sarbanes-Oxley Act, Europe General Data Protection Regulation and other region-specific mandates.
In 2024, USA Securities and Exchange Commission launched a new rule to enhance third-party financial transactions and this will affect 5,000 publicly traded companies and fueling the adoption of financial control management solutions.
The shift towards outsourcing Third-Party risk management activities is leading to increased adoption of managed services components
The organizations will face the complexities for managing third-party risks there is a shift towards outsourcing the activities to specialized managed services providers. The managed services components offer continuous risk assessment, vendor compliance monitoring and regulatory reporting and makes them attractive to vendors to streamline their risk management processes.
According to new update USA Department of Defense launched new cybersecurity maturity model certification requirement and it around 300,000 contractors. Many vendors will outsource third-party risk management activities to managed services providers for complying with stricter cybersecurity standards.
Growing adoption of global compliance standards creates opportunities for compliance management components to cater to multinational enterprises
The enterprises help to operate across multiple jurisdictions and they face pressure to comply with a wide range of international regulations such as the Europe General Data Protection Regulation, USA Foreign Corrupt Practices Act and the Anti-Money Laundering directives globally.
The standards require comprehensive compliance management solutions for ensuring third-party vendors adhering to all relevant legal and regulatory requirements. According to European Commission plans to constrict GDPR enforcement for non-compliance at 4% of global revenue.
This is anticipated to lead 30% increase in the adoption of compliance management components by multinational enterprises over the next two years to avoid the penalties.
Managing third-party risk involves sharing sensitive data, raising concerns about data privacy and security
The organizations are engaging with third-party service providers and they typically need to exchange data related to financial transactions, personal information and operational details. The data sharing is very crucial for assessing the risk associated with these vendors but it also exposes sensitive information to potential breaches.
The key concern is that third-party vendors not have the same data protection standards as the hiring organization and which will raise the risk of data breaches or cyberattacks. Even with strong risk management systems the vulnerabilities will occur if the vendor’s security is weak.
Principal Consultant
The global third-party risk management market is experienced growth. The sales during this period were driven by the increasing regulatory pressures and the rising need for comprehensive risk management solutions. The market grows at 9.7% with the sales reaching by end of 2023 6,400.0 Million.
The growth was largely propelled by various concerns about data breaches and compliance requirements across different industries and it is prompting organizations to invest in advanced solutions.
Looking forward from the period 2024 to 2034 the demand for solutions is anticipated to continue and it is driven by evolving regulations, rising cybersecurity threats and the increasing complexity of third-party relationships. The market is poised at a CAGR 12.9% from the period 2024 to 2034 and with sales projected by end of 2034 24,311.6 Million.
The various factors contributing to this growth such as the expansion of global regulatory frameworks, advancements in technology and the growing emphasis on data protection and risk mitigation. Organizations are increasingly seeking for integrated solutions to address the challenges and to ensure robust third-party management strategies.
Tier 1 vendors are the major players with significant market share and global reach. Vendors such as IBM, Deloitte and SailPoint dominating this tier and cater around 45% to 50% of the market. They are focused on large-scale operations and comprehensive solutions to make the preferred choice for large enterprises.
Tier 2 includes well-established vendors with a substantial presence but less market share compared to Tier 1. Vendors such as Archer, MetricStream and RiskWatch are prominent in this category holds around 10% to 15% of the market.
Tier 2 vendors offer specialized solutions and cater to mid-sized enterprises with more focused on risk management tools.
Tier 3 vendors consist of niche players and emerging companies that help to provide targeted or innovative solutions. Vendors such as Zylo, ProcessUnity and Prevalent fall into this category and they are capturing 30% to 35% of the market. Tier 3 vendors preferred to smaller organizations or those looking for specialized functionalities.
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The section highlights the CAGRs of countries experiencing growth in the Third Party Risk Management market, along with the latest advancements contributing to overall market development. Based on current estimates, India, China and Germany are expected to see steady growth during the forecast period.
| Countries | CAGR from 2024 to 2034 |
|---|---|
| India | 15.9% |
| China | 14.3% |
| Germany | 8.3% |
| Japan | 13.1% |
| United States | 10.4% |
As the sectors is increasing the complexity and scale of operations and it is crucial for vendors for managing risks associated with third party vendors. Also, the need to ensure supply chain steadiness to maintain compliance with evolving regulations and protect against potential disruptions caused by vendor failures. According to government of China focused on stringent environmental regulations and it help for reducing carbon emissions by 15% by the end of 2025 and it will affect 40,000 manufacturing firms.
The policy is anticipated to propel 25% increase in the adoption of third-party risk management solutions in manufacturing sector in the next three years with the significant growth also anticipated in the energy and utilities sector.
China is anticipated to see substantial growth at a CAGR 14.3% from 2024 to 2034 in the third-party risk management market.
As the sectors are relying on third-party vendors for different operations from IT services to customer support and help for ensuring compliance with stringent regulations becomes very essential to mitigate risks such as data breaches, fraud and operational disruptions.
The Reserve Bank of India announced new guidelines requiring 1,200 financial institutions for enhancing vendor risk management and it is focusing on cybersecurity and data protection. The Telecom Regulatory Authority of India constricted data privacy and network security regulations is propelling the demand for solutions in both the sector such as BFSI and IT & Telecom.
India's Third-Party Risk Management market is anticipated to expand from 787.6 Million in 2024 to 2,649.96 Million by 2034 poised at a CAGR 15.9% during this period.
The government contracts are focused on expansion in areas such as cybersecurity, infrastructure and defense technology and also there is a growing need for monitoring third-party vendors to ensure that to meet federal regulations and security standards. In 2023, Department of Defense USA is focused on defense budget by 5% and USD 50 billion allocated for cybersecurity and defense infrastructure contracts.
The change will affect 10,000 contractors and need to adopt advanced solutions to meet new cybersecurity standards under the cybersecurity maturity model certification. USA is anticipated to see substantial growth up to 10.4% in the Third-Party Risk Management market significantly holds dominant share of 74.2% in 2024.
The section provides detailed insights into key segments of the Third-Party Risk Management market. The enterprise size category includes small & medium enterprise and large enterprise.
Deployment Type category such as cloud based and On-Premise. Among these, small & medium enterprise size is growing quickly. The cloud-based hold largest market shares in Third-Party Risk Management.
| Enterprise Size | Small & Medium size |
|---|---|
| CAGR (2024 to 2034) | 14.2% |
As the small & medium enterprise size use more in third-party vendors for different services and also they face higher risks in compliance, data security and operations. To tackle these issues many SMEs are focused on adopting third-party risk management solutions to handle and reduce these risks effectively. In 2024, USA Small Business Administration is offering USD 1 billion to help 15,000 SMEs for implementing advanced risk management systems.
This funding helps to support SMEs in adopting third-party risk management solutions to improve their compliance and data security. SMEs is anticipated to see substantial growth at a CAGR 14.2% from 2024 to 2034 in the Third-Party Risk Management market.
| Deployment Type | Cloud Based |
|---|---|
| Value Share | 54.9% |
The cloud-based solutions are focused on scalability, flexibility and cost efficiency and it allows organizations to easily manage and monitor third-party risks without investing in physical infrastructure.
The solutions enable businesses for integration of various risk management tools for seamless access data from anywhere and help in today’s remote and hybrid work environments.
The USA Department of Commerce invested USD 500 million to help 8,000 companies switch to cloud-based technologies. The funding will boost business ability for managing risks and comply with regulations. Cloud Based are projected to dominate the Third-Party Risk Management market, capturing a substantial share of 54.9% in 2024.
The competition in the third-party risk management market is intensifying as companies focused for enhancing solutions to meet evolving industry needs. Key vendors are investing in advanced technologies to improve risk assessment and compliance management.
The market is also witnessing an increase in strategic partnerships and product innovations which help to offer more comprehensive and automated tools.
Industry Update
In terms of Third Party Risk Management, the segment is divided into solution and services.
In terms of deployment type, the segment is segregated into cloud based and on-premises.
In terms of organization size, the segment is segregated into large enterprises and SMEs.
In terms of vertical, the segment is segregated into BFSI, IT and Telecom, healthcare and life sciences, government and defense, retail and consumer goods, manufacturing and energy and utilities.
A regional analysis has been carried out in key countries of North America, Latin America, East Asia, South Asia & Pacific, Western Europe, Eastern Europe and Middle East & Africa.
The Global Third Party Risk Management industry is projected to witness CAGR of 12.9% between 2024 and 2034.
The Global Third Party Risk Management industry stood at USD 7,225.6 million in 2024.
The Global Third Party Risk Management industry is anticipated to reach USD 24,311.6 million by 2034 end.
South Asia & Pacific is set to record the highest CAGR of 14.5% in the assessment period.
The key players operating in the Global Third Party Risk Management industry are RSA, Genpact, MetricStream, Deloitte, KPMG and Bit Sight Technologies.
1. Executive Summary 2. Market Introduction, including Taxonomy and Market Definition 3. Market Trends and Success Factors, including Macro-Economic Factors, Market Dynamics, and Recent Organization Size Developments 4. Pricing Analysis, By Vendors 5. Global Market Demand Analysis 2019 to 2023 and Forecast 2024 to 2034, including Historical Analysis and Future Projections 6. Global Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Component 6.1. Solution 6.2. Services 7. Global Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Deployment Type 7.1. Cloud Based 7.2. On-Premises 8. Global Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Organization Size 8.1. Large Enterprises 8.2. SMEs 9. Global Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Vertical 9.1. BFSI 9.2. IT and Telecom 9.3. Healthcare and Life Sciences 9.4. Government and Defense 9.5. Retail and Consumer Goods 9.6. Manufacturing 9.7. Energy and Utilities 10. Global Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Region 10.1. North America 10.2. Latin America 10.3. East Asia 10.4. South Asia Pacific 10.5. Western Europe 10.6. Eastern Europe 10.7. Middle East and Africa 11. North America Sales Analysis 2019 to 2023 and Forecast 2024 to 2034, by Key Segments and Countries 12. Latin America Sales Analysis 2019 to 2023 and Forecast 2024 to 2034, by Key Segments and Countries 13. East Asia Sales Analysis 2019 to 2023 and Forecast 2024 to 2034, by Key Segments and Countries 14. South Asia & Pacific Sales Analysis 2019 to 2023 and Forecast 2024 to 2034, by Key Segments and Countries 15. Western Europe Sales Analysis 2019 to 2023 and Forecast 2024 to 2034, by Key Segments and Countries 16. Eastern Europe Sales Analysis 2019 to 2023 and Forecast 2024 to 2034, by Key Segments and Countries 17. Middle East and Africa Sales Analysis 2019 to 2023 and Forecast 2024 to 2034, by Key Segments and Countries 18. Sales Forecast 2024 to 2034 by Component, Deployment Type, Organization Size and Vertical for 30 Countries 19. Competition Outlook, including Market Structure Analysis, Company Share Analysis by Key Players, and Competition Dashboard 20. Company Profile 20.1. RSA 20.2. Genpact 20.3. MetricStream 20.4. Deloitte 20.5. KPMG 20.6. Bit Sight Technologies 20.7. Ernst & Young 20.8. PwC 20.9. Process Unity 20.10. Ven minder 20.11. Resolver 20.12. NAVEX Global
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Third-Party Risk Management Market
