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Global Vendor Risk Management Market Grows at a Staggering CAGR of 15.21%

Introduction

In modern business, the issue of third-party risk management is impossible to be overemphasized. Third-party risk management is essential to financial control management, contract management, operational risk management, audit management, and compliance management because it deals with managing hard situations and means finding solutions to complex problems.

Vendor risk management is the market and a process that involves controlling, recognizing, monitoring, and accessing a wide variety of potential risks. The hazards included operational risk, compliance risk, strategic risk, information security risk, and many other potential dangers. In other words, all these dangers are potentially brought about by the relationships that organizations have with outside parties.

Market Dynamics

Complexity of global supply chains drives the global market

The intricacies of global supply chains are increasingly complicated as companies rely on extensive networks of vendors, suppliers, and partners across various geographies and industries. This complexity makes it challenging to maintain oversight in these ecosystems, particularly concerning risks related to operational disruptions, financial instability, and reputational threats.

Factors such as political instability, regulatory changes, and currency fluctuations further amplify these risks, necessitating the implementation of sophisticated vendor risk management (VRM) systems that can navigate dynamic challenges effectively.

For instance, the World Economic Forum reported that supply chain disruptions caused by global crises in 2021 alone resulted in an estimated loss of $4 trillion in global trade.

This staggering figure underscores the critical need for efficient VRM solutions to mitigate risks, enhance supply chain resilience, and protect organizational interests in an unpredictable global environment.

Technological advancements in VRM create tremendous opportunities

Technological advancements offer substantial opportunities for the global vendor risk management (VRM) market. As organizations increasingly adopt digital solutions to manage vendor relationships, innovations such as artificial intelligence (AI), machine learning, and data analytics are revolutionizing the assessment and mitigation of risks. These technologies enable companies to quickly process large volumes of data, identify trends, and forecast potential vendor-related challenges before they occur.

For instance, IBM utilizes AI-powered VRM solutions to enhance its risk assessment capabilities. Their platform analyzes vendor performance data, compliance records, and market trends in real time, providing organizations with actionable insights that facilitate proactive decision-making.

This technological evolution not only streamlines risk management processes but also helps businesses comply with regulations and uphold high-quality standards across their vendor networks. As technology continues to progress, VRM solutions are poised to evolve further, presenting even greater opportunities for effective risk mitigation and operational excellence.

Regional Analysis

North America holds the largest share of the global vendor risk management (VRM) market, driven by stringent compliance requirements, a concentration of major enterprises, and a robust IT infrastructure. The region, particularly the United States, enforces rigorous regulatory standards such as the Sarbanes-Oxley Act (SOX), the General Data Protection Regulation (GDPR), and the Health Insurance Portability and Accountability Act (HIPAA). These regulations compel organizations to invest significantly in vendor risk management solutions to ensure compliance and mitigate risks associated with third-party vendors.

With critical sectors like banking, financial services, insurance (BFSI), information technology (IT), and healthcare prevalent in North America, the demand for comprehensive VRM systems is further amplified. For example, the U.S. Federal Trade Commission (FTC) reports that compliance violations and cybersecurity threats linked to third-party vendors impacted over 60% of businesses in the region, highlighting the urgent need for effective VRM solutions to safeguard against these risks.

Key Highlights

The global vendor risk management market size was valued at USD 11.1 billion in 2024 and is estimated to reach an expected value of USD 39.7 billion by 2033, growing at a CAGR of 15.21% during the forecast period (2025-2033).
Based on Components, the global market is divided into Solutions and Services. Service Segment Dominated the Market with the Largest Market Revenue.
Based on Deployment Type, the global market is divided into On-premises and Cloud. Cloud Segment Dominated the Market with the Largest Market Revenue.
Based on Organization Size, the global market is divided into SMEs and Large Enterprises. Large Enterprises Segment Dominated the Market with the Largest Market Revenue.
Based on Vertical, the global market is divided into BFSI, Telecom and IT, Consumer Goods and Retail, Healthcare and Life Sciences, Manufacturing, Energy and Utilities, Government, and Others (Education and Media & Entertainment). BFSI Segment Dominated the Market with the Largest Market Revenue.
North America is the highest global market shareholder.

Competitive Players

IBM Corporation (U.S.)
MetricStream (U.S.)
Lockpath Inc. (U.S.)
Logic Manager (U.S.)
Rsam (U.S.)
BitSight Technologies (U.S.)
RSA (U.S.)
Genpact (U.S.)
Resolver (Canada)
SAI Global (Australia)
Optiv (U.S.)
Quantivate (U.S.)
BWise Internal Control (The Netherlands)
RapidRatings (U.S.)
ProcessUnity (U.S.)
VendorInsight (U.S.)

Recent Developments

In September 2024, Vanta Inc. announced new product features and enhancements aimed at automating and streamlining governance, risk, and compliance processes for businesses. These innovations focus on simplifying compliance workflows, enabling companies to manage vendor risks more effectively while ensuring adherence to regulatory standards.

Segmentation

By Component
1. Solutions
  1. Vendor Information Management
  2. Contract Management
  3. Financial Control
  4. Compliance Management
  5. Audit Management
  6. Quality Assurance Management
2. Services
  1. Professional Services
    1. Consulting
    2. Support and Maintenance
    3. Deployment and Integration
  2. Managed Services
By Deployment Type
1. On-premises
2. Cloud
By Organization Size
1. SMEs
2. Large Enterprises
3. Market By Vertical
4. BFSI
5. Telecom and IT
6. Consumer Goods and Retail
7. Healthcare and Life Sciences
8. Manufacturing
9. Energy and Utilities
10. Government
11. Others (Education and Media & Entertainment)

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The global vendor risk management market was valued at USD 7.26 billion in 2021 and is projected to reach USD 25.96 billion by 2030, registering a CAGR of 15.21% from 2022 to 2030. The market for vendor risk management is a method for regulating, identifying, monitoring, and assessing a variety of potential risks. These included operational risk, compliance risk, strategic risk, and several information security risks. All of these dangers can result from enterprises' partnerships with third parties. Market Dynamics Need for the efficient management of complex vendor ecosystems Organizations invest a substantial amount of time and energy evaluating the vendors who provide products and services that meet their business needs. Vendor risk management systems decrease the time and effort required to determine the essential factors of vendor performance and to score suppliers based on their product or service delivery, timeliness, and quality. When a business is reliant on several vendors, vendor risk management solutions aid in determining and recognizing the important issues associated with sourcing goods and services from third-party vendors. Managing various vendors is a laborious chore for any organization, but a vendor risk management solution simplifies the enterprise's evaluation of the risks associated with different vendors by providing a comprehensive risk assessment. Dependence on non-formal and manual processes by many organizations A significant section of the worldwide market continues to rely on manual methods to evaluate and estimate vendor dependency risks. Many organizations have not yet recognized the need for vendor risk management systems to evaluate their vendors' performance. These firms are hesitant to implement software for vendor risk management in their systems. Numerous firms rely on manual methods to detect hazards and are oblivious to the significance of vendor risk management solutions and services in mitigating vendor risks. Streamline the vendor risk assessment process To ensure the on-time delivery of products and services to consumers, large enterprises frequently rely on a multitude of suppliers for business continuity and supply chain process support. To handle such crucial difficulties, it is necessary to assess the numerous challenges and dangers posed by suppliers. Solutions for vendor risk management prioritize each risk and streamline the risk-resolution processes inside an organization. In addition, these technologies simplify the businesses' efforts to minimize risks while analyzing and selecting a vendor for particular activities. Regional analysis of the global vendor risk management market The market is split by region into North America, Europe, Asia-Pacific, and LAMEA. North America is predicted to dominate the global vendor risk management market. Advanced technical breakthroughs in AI, machine learning, cloud, and IoT, growth of end-user sectors such as BFSI, healthcare, and others, increasing investments, and a growing emphasis on data security are driving the vendor risk management market in the area. In January 2019, a third-party vendor misconfigured a server where Ascension kept digital versions of paper financial documents, causing a data leak at numerous US banks and financial firms. One could access a database with 24 million credit records containing client data. Rapid Ratings International Inc., a provider of vendor risk management solutions, rated 284 U.S. industrial enterprises that failed or filed for bankruptcy between 2014 and 2018. Poor financial health suppliers have a higher possibility of poor performance and insolvency. 95% of the 37 U.S. industrial enterprises that failed in 2018 had a "High Risk" or "Very High Risk" FHR. Walmart and Amazon, among others, have global supply chains in the region. Thus, vendor risk management players can infiltrate the region by using AI and machine learning. Key Highlights The global vendor risk management market was valued at USD 7.26 billion in 2021 and is projected to reach USD 25.96 billion by 2030, registering a CAGR of 15.21% from 2022 to 2030. BFSI is expected to witness significant growth during the forecasted period North America held the largest share of the market in 2021 and is expected to do the same during the forecasted period. Competitive players in the global vendor risk management market IBM Corporation (U.S.) MetricStream (U.S.) Lockpath Inc. (U.S.) Logic Manager (U.S.) Rsam (U.S.) BitSight Technologies (U.S.) RSA (U.S.) Genpact (U.S.) Resolver (Canada) SAI Global (Australia) Optiv (U.S.) Quantivate (U.S.) BWise Internal Control (The Netherlands) RapidRatings (U.S.) ProcessUnity (U.S.) and VendorInsight (U.S.) Recent Developments by key players In February 2020, RSA, a provider of Business-Driven Security solutions that assist enterprises in managing digital risk, announced that it would offer RSA Archer SaaS (software as a service) to customers that wish to use the RSA Archer Suite in the cloud. The RSA Archer Suite enables enterprises of any risk management maturity level to manage risk more effectively and efficiently. In August 2019, IBM announced the debut of a new blockchain-based supply chain risk mitigation solution. The blockchain network enables organizations to validate and onboard their vendors more rapidly while preserving a secure audit trail of buyer-supplier interactions across the supply chain. In July 2017, Keylight 4.7 is an improved version of LockPath's Keylight platform package. The revised version included the Health and Safety Manager (HSM) program as well as improved reporting and calculating capabilities. In May 2017, RSA, a division of Dell Technologies, announced several enhancements to its RSA SecurID Access product. The upgrade added a cloud-based authentication-as-a-service option, facilitating secure access to both on-premises and cloud-based resources and systems from anywhere, at any time, for any user. The global vendor risk management market segmentation By Component Solutions Vendor Information Management Contract Management Financial Control Compliance Management Audit Management Quality Assurance Management Services Professional Services Consulting Support and Maintenance Deployment and Integration Managed Services By Deployment Type On-premises Cloud By Organization Size SMEs Large Enterprises Market By Vertical BFSI Telecom and IT Consumer Goods and Retail Healthcare and Life Sciences Manufacturing Energy and Utilities Government Others (Education and Media & Entertainment) By Region North America Europe The Middle East and Africa (MEA) Asia Pacific (APAC) Latin America