The global Enterprise Governance, Risk and Compliance Market is expected to grow at an 14.1% CAGR during the forecast period.
GRC is an integrated holistic approach to corporate governance, risk, and compliance that allows an organization to act ethically and according to its risk appetite, internal policy, and external regulations through alignment of strategy, processes, technologies, and people to improve efficiency and effectiveness. In short, three related facets governance, risk management, and compliance that ensure the organization's reliable objectives, uncertainty, and integrity can be addressed.
The rising complexities related to governance, risk management, and compliance have given rise to GRC solutions across various industries. Most of the work involved in documenting and reporting risk management and operational compliance activities closely related to corporate management and business objectives can be automated by the GRC software. The main end-users are internal auditors and audit committees, risk and compliance managers, and responsible managers. More companies are now aware that technology is useful for business objectives and strategies to enable businesses to ensure governance, risk, and compliance.
Additionally, the introduction of Big Data will contribute to the growing EGRC market by supporting the analysis of laws, the development of processes and regulations to support professionals, and informed business choices.
The increasing complexity of regulatory standards and compliance with government regulations are anticipated to boost the demand for eGRC systems. Companies are shifting from the Sarbanes Oxley Act to traditional regulatory compliance rules and guidance, to advanced risk-related and compliance-related regulatory concerns. Businesses must remain compliant with regulations such as HIPAA, GDPR, COBIT, and other national and federal mandates to avoid operational losses. The growing strictness of compliance mandates is likely to drive market growth for corporate governance, risk, and compliance during the forecast period.
The trends of integrating technologies like AI, IoT, and machine learning with eGRC solutions are expected to accelerate market growth. AI-powered solutions are gaining momentum due to effective analytical capabilities and the ability to process large data volumes daily. These solutions also offer additional advantages, including efficiency improvement, process optimization, cost reduction, and more.
The regulatory policies may differ based on business and country. Many nations do not have specific bodies to implement regulatory policies. The absence of specific standards is a major limiting factor in the growth of the eGRC market. These headwinds are also a challenge for eGRC service providers to meet different end-user requirements. Various organizations are reluctant to invest in corporate governance, risk, and compliance technologies in emerging markets due to high levels of capital investment and lack of awareness of the long-term benefits of corporate governance, risk, and compliance.
Moreover, the lack of government funding for industrial research, the lack of a technological road map, the lack of a clear investment community outlook, and the lack of a national business governance strategy, risk-based solutions, and compliance solutions are key factors that are expected to hinder the growth of the eGRC market.
Increasing data volumes offer a wide range of opportunities for business professionals to improve their work, such as auditing, risk and compliance. Analyzing and submitting data silos to the stakeholders at the appropriate time is increasingly becoming important. As a result, various companies are offering AI-enabled solutions to help businesses meet various regulatory and compliance needs. These solutions, built on analytical tools and business intelligence, allow businesses to make informed decisions with data insights. AI technology can also automate various risk management tasks while Blockchain technology can speed up the management of GRC data and the sharing process.
Based on component the market is bifurcated into software and services. In 2019, the software segment accounted for more than 64% revenue share is expected to grow during the forecast period.
The dominance can be due to the reduction of the total ownership software cost with integrated solutions to address a myriad of regulations, such as supply chain compliance, quality control, and OSHA. The increasing need for risk assessment and audits by third parties and suppliers is likely to drive the market at a significant pace. Various applications include compliance management, policy management, audit management, incident management, and risk management to coordinate and control requirements. The demand for eGRC software is expected to increase owing to increasing requirements for streamlined and automated eGRC programs.
The emergence of the Internet of Things (IoT) and other digital frameworks, supported by innovations in GRC processes, has led to significant business process improvements. The software is used to handle an internal audit that helps an organization to identify, protect risks and compliance and risk assessment instruments. The organization's low internet connectivity costs and increasing use of Wi-Fi reduce the cost of technology.
The second-largest software segment, valued at USD 4.42 billion in 2019, emerged as audit management. Audit management solutions make it easier for organizations to comply and audit their responsibilities by providing a centralized platform for accessing prior assessment information and managing appropriate or ongoing assessments. It also helps to promote compliance initiatives across the company to strengthen better working practices and greater accountability within individual business units.
Based on vertical, the BFSI segment is the biggest revenue contributor to the eGRC market in the world. To improve its overall performance and provide its clients with a seamless experience, the BFSI industry is under increasing pressure. However, analytics are now being used by banks and financial institutions to detect any links at the level of the entity, as well as to monitor the suspicious activities of the various linked accounts used for laundering activities. As a result, increased spending has been directed towards implementing advanced EGRC solutions based on technology. A higher budget to safeguard the BFSI organization, thus, contributes to market growth.
The spread of COVID-19 resulted in a lockdown and government restrictions. It is difficult for risk managers and compliance officials to address these issues. In this situation, optimizing risk management with eGRC solutions emerged as a preferred solution for an organization to ensure business continuity. Under normal circumstances, the best option for risk management is being proactive, but the COVID-19 has resulted in a focused approach towards approaches that can respond spontaneously to recent developments.
North America dominated the 2019 Global Enterprise governance, risk, and compliance (eGRC) market. North America is witnessing the adoption of high technology in almost every part of the business sector and is therefore considered to be the primary driver of enterprise implementation, governance, risk, and compliance growth in the North American market. Most suppliers in the region are engaged in the development of products and services for artificial intelligence (AI), analytics, natural language processing (NLP), and machine learning (ML) and are therefore expected to drive regional market growth.
Asia-Pacific is expected to register the fastest CAGR over the forecast period. Other important countries that are contributing to the growing adoption of the eGRC solution are Japan, South Korea, Taiwan, Vietnam, and Indonesia. Vietnam is catching up with 5G telecommunications services, as Viettel, Vietnamobile, MobiFone, Vietnam Posts, and the Telecommunications Group have worked together to launch the service by 2020. The fast development of IT infrastructure and the need to address cyber security risks are also driving the market.
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