Third-Party Risk Management Market Size, Share, Growth, and Industry Analysis, By Type (Financial Controls, Contract Management, Relationship Management, Others), And By Application (Large Business, SMBs), and Regional Insights and Forecast to 2032

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THIRD-PARTY RISK MANAGEMENT MARKET OVERVIEW

The global third-party risk management market size was USD 7.41 billion was 2024 and will touch USD 27.84 billion by 2032, exhibiting a CAGR of 18.2% during the forecast period.

TPRM stands for Third-Party Risk Management and is an essential procedure that helps to evaluate risks connected with outsourcing certain operations to third parties such as vendors or suppliers. It is the assessment of the security activity, protection of the information and the risk management of the external partners that the organization has to meet the organization’s security level and the compliance sets of the organization. TPRM enables organizations to shield their crucial information assets, patents, trade secrets and reputations from the risks of breach or leak that could result from Third-Party relationships.

The target market for Third-Party Risk Management professionals is expanding due to rising dependence on third parties and supply chain complications. Today, a growing number of international companies use TPRM solutions to accommodate and minimize threats in the context of their Third-Party stakeholders. This increasing need has prompted the emergence of complex TPRM technologies and services such as assessment solutions, vendor management systems, and constant monitoring solutions. Because the secure usage of Third-Party Risk Management has longevity for the future especially when organizations focus on security and compliance, its adoption around the world will likely increase in the coming years.

COVID-19 IMPACT

"The Third-Party Risk Management Market Industry Had a Negative Effect Due to theRemote Work Models during the COVID-19 Pandemic"

The global COVID-19 pandemic has been unprecedented and staggering, with the market experiencing Less-than-anticipated demand across all regions compared to pre-pandemic levels. The sudden market growth reflected by the rise in CAGR is attributable to the market’s growth and demand returning to pre-pandemic levels.

In this paper, it can be stated that Second-Party Risk Management could experience quite several key issues due to the COVID-19 pandemic. Organizations had already been experiencing the benefits of the mobile workforce but accelerated by the pandemic, remote work became the new norm; these created concerns, as more Third-Party vendors and digital platforms have been used as targets for attacks. Cybersecurity threats increased with more workers connecting remotely with installer suspects able to corrupt computer systems. Some of the third parties became unreliable due to disruptions in the global supply chain traced to lockdowns and limitations on travel. Third, the lack of Third-Party assurance and the financial turbulence caused disruptions in the evaluation of the third party’s financial soundness and operational solvency. These factors explained the need for good TPRM as a measure of curtailing risks and as a contingency measure in case of disruption of business.

LATEST TREND

"The Rise of Niche TPRM Providers to Drive Market Growth"

Market growth is underpinned by the increased popularity of specialized Third-Party Risk Management (TPRM) providers. Large organizations are managing a vast and growing array of direct Third-Party relationships. However, these narrow specialist SIPs provide highly focused service offerings that meet the idiosyncratic needs of particular industries and satisfy increasingly onerous regulatory demands. Such vendors can offer a wide range of services and under their umbrella have many specialists who understand potential risks associated with particular industries, including healthcare, finance, or technologies. As a result of the concentration on distinctive sectors, specialized TPRM providers can identify higher levels of risk, conduct relevant compliance reviews effectively, and provide appropriate security suggestions on corresponding products.

THIRD-PARTY RISK MANAGEMENT MARKET SEGMENTATION

By Type

Based on Type, the global market can be categorized into Financial Controls, Contract Management, Relationship Management, Others.

• Financial Controls: This segment of the course consists of managing the financial risks of third parties. It entails evaluating the entity’s financial status, evaluating credit profiles and as well as monitor and enforcing the stipulated financial policies.

• Contract Management: This segment deals with the rights and duties of business entities when dealing with third parties. It entails entering into contracts or keeping the rights and duties of the contracts provided to and from the organization in check to achieve their objective of reducing legal and operational risks.

• Relationship Management: This segment deals with the management of relationships with third party suppliers. It refers to the process of making sure that organizations are in touch with their suppliers with constant checks on their progress and dealing with any problems that might arise with their performance.

• Others: This category includes other related TPRM activities such as Cybersecurity risk, Data Privacy and Protection, Business continuity planning among others.

By Application

Based on Application the global market can be categorized intoLarge Business, SMBs.

• Large Businesses: Some of the large significant organizations with broad supply chains and numerous Third-Party partners would benefit tremendously from advanced TPRM strategies. These solutions assist them in addressing the risks accrued from strategic partners, vendors as well as suppliers.

• SMBs: Although SMBs have less interaction with third parties than large enterprises, they are just as exposed to Third-Party Risks. With simplified TPRM solutions being made available, they can manage these risks and assure compliance with the regulations in question.

MARKET DYNAMICS

Market dynamics include driving and restraining factors, opportunities, and challenges stating the market conditions.

Driving Factors

"Increasing Regulatory Scrutiny to Boost the Market"

Increasing Regulatory Scrutiny is a component of the Third-Party Risk Management Market Growth. Especially, as regulatory bodies in various countries strengthen their regulatory requirements for data privacy, cybersecurity, and financial compliance, organizations are under pressure. This heightened regulatory scrutiny requires organizations to develop sound TPRM practices to keep their Third-Party vendors on their toes. Failure, on the other hand, opens the business to very expensive penalties, loss of reputation, and legal actions. To manage these risks, companies are exploring next-generation TPRM solutions for risk assessment and monitoring of third parties hence driving the market for TPRM.

"Rising Cyber Threats to Expand the Market"

These advanced threats and frequency in the past few years have enhanced the demand for the Third - Third-Party Risk Management Market. Today’s organizations make more extensive use of Third-Party vendors and service providers, enhancing the risk of cyber incidents that threat agents can use to invade an organization’s data, degrade services, or harm its reputation. To such risks, TPRM has become critical for organizations to ensure that their Third-Party partners have sufficient security measures in place. These increasing needs for a sound TPRM solution are contributing to the growth and new product development in the market.

Restraining Factor

"Complexity and Cost Impede Market Growth"

Although the rising significance of TPRM bolsters the size of the market, the integrated intricacy and costs linked to deploying and sustaining robust TPRM programs constrain the market expansion. One of the issues that is common with organizations is how they can be able to evaluate and monitor multiple Third-Party relations, especially for those companies which have a complex supply chain. Although implementing TPRM tools, technologies, and qualified personnel can be costly at the start. More importantly, constant surveillance and risk analyses are costly exercises. These factors can eliminate some organizations; especially smaller businesses, from fully improving on their strong TPRM.

Opportunity

"AI and Automation for the Product Opportunity in the Market"

AI and automation stand as a major opportunity for the Third-Party Risk Management (TPRM) market. With the help of AI technologies, the different stages of TPRM, including vendor identification, risk evaluation, and monitoring, can be fully or partially performed by AI technologies. Using artificial intelligence, various big sets of data can be scrutinized and prospective dangers can be recognized and estimated together with the likelihood of threats in the future in addition to the most important levels of prioritizing on how to handle the risks. Many times, manual operations can be time-consuming, prone to error and slow process. This allows organizations to have better control of a higher volume of Third-Party relationships and ensures available TPRM solutions are not exclusive to large organizations.

Challenge

"Data Privacy Concerns Could Be a Potential Challenge for Consumers"

Third-Party Risk Management (TPRM) plays an important role in helping organizations to safeguard their data and reputation; however, it causes concerns to customers. This point of concern comes in light of the growing use of outsourcing third parties data processing and storage companies and the ever-growing risk of data leakage. The response also suggests that individuals will be cautious when submitting their details to organizations that work with Third-Party suppliers if they do not trust the safeguards provided by the suppliers. To these effects, therefore, organizations must ensure that they respect data privacy and have full disclosure on privacy-related issues linking the same to the selection and control and or monitoring of Third-Party vendors.

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THIRD-PARTY RISK MANAGEMENT MARKET REGIONAL INSIGHTS

• North America

The North American market is relatively quite developed for Third-Party Risk Management (TPRM) solutions, due to ever-increasing regulatory demands and a focus on data protection. The United States Third-Party Risk Management Market has consistent and stringent regulations like GDPR & CCPA which have heightened the TPRM practices adoption in many organizations. Moreover, the availability of many MNCs and the increased density of technology organizations have also created extra demand for improved TPRM solutions.

• Europe

Another region that the TPRM market enjoys is Europe where the protection of data is highly regulated especially by GDPR. Specifically for the region, there is a growing concern about data privacy and protection that has created awareness of Third-Party Risks and the right measures to deploy. In addition, increasing trends across a vast number of industries such as finance, healthcare and manufacturing have translated to the growth of the TPRM market within Europe.

• Asia

TPRM solutions are a developing market in Asia with excellent potential for future growth due to the economic development rate and digitalization. Some of the major economies, particularly China, India, and Japan, are adopting superior and cloud-based solutions at a fast pace, putting them in the management of multiple Third-Party participants. However, there exist some issues in the region as follows, Inconsistent legal framework of cloud services, lack of standard security procedures for cloud services. As organizations in Asia become more aware of the risks associated with Third-Party relationships, the demand for effective TPRM solutions is expected to grow significantly.

KEY INDUSTRY PLAYERS

"Key Players Transforming the Third-Party Risk Management Market Landscape through Innovation and Global Strategy "

Key players in the Third-Party Risk Management Market play a key role in determining industry dynamics through innovation, product development, and strategic partnerships. Their reserves in research and development, coupled with effective marketing strategies, drive market growth. These influential players set industry standards, fostering competition and technological advancements.

List of Top Third-Party Risk Management Companies

• Bitsight Technologies (U.S)
• Genpact (India)
• NAVEX Global (U.S)
• MetricStream (U.S)
• SAI Global (Australia)
• Resolver (Canada)
• Galvanize (Canada)
• IBM (U.S)
• Optiv Security (U.S)
• RapidRatings (U.S)
• RSA Security (Dell) (U.S)
• Venminder (U.S)
• LogicManager (U.S)

KEY INDUSTRY DEVELOPMENT

2022: The integration of Third-Party Risk Management (TPRM) with cybersecurity has emerged as a critical development in recent years. With more and more organizations outsourcing products and services, supply chain security becomes a critical issue. By embedding TPRM with cybersecurity, an organization get a good picture of the risk involved and Third-Party weaknesses, as well as the best ways to secure the systems. This integrated approach is fruitful for the protection of confidential information and against cyber threats and for providing continuity of business.

REPORT COVERAGE

This report is based on historical analysis and forecast calculation that aims to help readers get a comprehensive understanding of the global Third-Party Risk Management Market from multiple angles, which also provides sufficient support to readers’ strategy and decision-making Also, this study comprises a comprehensive analysis of SWOT and provides insights for future developments within the market. It examines varied factors that contribute to the market's growth by discovering the dynamic categories and potential areas of innovation whose applications may influence its trajectory in the upcoming years. This analysis encompasses both recent trends and historical turning points into consideration, providing a holistic understanding of the market’s competitors and identifying capable areas for growth.

This research report examines the segmentation of the market by using both quantitative and qualitative methods to provide a thorough analysis that also evaluates the influence of strategic and financial perspectives on the market. Additionally, the report's regional assessments consider the dominant supply and demand forces that impact market growth. The competitive landscape is detailed meticulously, including shares of significant market competitors. The report incorporates unconventional research techniques, methodologies, and key strategies tailored for the anticipated frame of time. Overall, it offers valuable and comprehensive insights into the market dynamics professionally and understandably.