The global policy management software market size was valued at USD 0.96 billion in 2021. It is expected to reach USD 4.19 billion by 2030, growing at a CAGR of 15.9% during the forecast period (2022–2030). Software for policy management is a category of application that helps businesses become more effective in at-risk management and automates the procedure for policy documentation within an organization. In addition, policy management software assists businesses in supporting a variety of governance, risk, and compliance (GRC) issues. This is accomplished by a culture of compliance within the organization and assisting businesses in accomplishing their objectives.
The creation, dissemination, and upkeep of policies and procedures within an organization to mitigate various risks connected with the organization's management are the primary goals of policy management software. In addition, numerous sectors are embracing the use of policy management software to accomplish their desired outcomes without negatively impacting either the internal or the external environment of their respective organizations.
The rise in the adoption of policy management software across various industries and the surge in the need for policy management vendors to streamline their business operations are the primary factors driving the global market for policy management software.
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Adoption of Industry-Specific Policy Management Software to Support Market Growth
The market is driven by the adoption of policy management software in various industries, including the banking, insurance, and financial services sector (BFSI), the information technology and telecommunications sector (IT & Telecom), the transportation sector (transportation), and the healthcare sector (healthcare). This is due to the numerous benefits of this software, which include simplifying policy lifecycle management service, generating notifications and escalations based on employee performance, and recording the risk impact of policy exceptions. Additionally, policy management software assists financial services, credit unions, and banks in achieving an automated, consistent method for adjusting and managing policies by various newly imposed government regulations. Therefore, this software is being adopted by a variety of banking and fintech industries to reduce risk and adhere to the new guidelines, driving the market's growth.
In addition, a variety of different healthcare sectors all over the world are adopting policy management software to increase their operational efficiency and to impose new additional security and permission options for documentation and sensitive information. This software facilitates improved collaboration between policymakers and medical professionals and enables the healthcare industry to share vital information with policy agents more efficiently.
Rising Demand from Policy Management Vendors for Streamlining Operations to Propel Growth
Policy management vendors use policy management software to reduce the time needed to manage policies, design accurate policies, avoid duplicating or aging policies, and ensure that their workforce understands any new policies. Additionally, policy management software assists vendors in streamlining and automating workflow processes and enhancing the quality of compliance management service. Many healthcare vendors are adopting policy management software to assist medical professionals in managing compliance, policies, and procedures to improve treatment efficacy and lower patient risk. In addition, incorporating cutting-edge technologies such as the internet of things (IoT), machine learning, and artificial intelligence into policy management software enables vendors to streamline their business processes, which drives the expansion. The demand for policy management software in the manufacturing, construction, and entertainment industries. This demand is growing by the need for faster management of various facilities, including the ability to create and edit policies and procedures, manage approval of workflow, and share the finalized policy document with employees.
High Cost Associated with Policy Management Software to Restrict Market Growth
Small and medium-sized businesses struggle to provide practical policy management software solutions due to budget constraints brought on by the high implementation costs, which restrict the market's growth. In addition, there are a variety of costs associated with the services that are related to policy management software. These costs include consulting, maintenance, installation, integration, and upgrade fees. End users, particularly LAMEA and Asia, face significant challenges in overcoming the financial barriers that prevent them from adopting policy management software. Additionally, many organizations' challenges associated with traditional and advanced system integrations have speculated the market's growth, particularly among smaller businesses.
Additionally, the high costs of implementation and integration associated with policy management software act as a barrier to the expansion of the market to some degree. During the deployment of these solutions in recent years, numerous security flaws have been discovered in the installation and configuration of the policy management software. These flaws have been observed among banking institutions, hospitals, and the information technology industry. Due to the limited number of people with the necessary technical expertise, these institutions have difficulty implementing policy management software. This is one of the primary factors that slow the expansion of the market.
Rising Adoption by Small and Medium-Sized Businesses to Boost Market Opportunities
Small and medium-sized businesses have seen a reduction in the costs associated with making initial investments due to the availability of accessible cheap data centers provided by cloud vendors. This has increased the demand for software based on the cloud to manage policies among small and medium-sized businesses. In addition, cloud services have simplified the process of storing and accessing data for businesses, making it easier for those businesses to use their policy management software. By utilizing software for policy management hosted in the cloud, businesses can improve the flow of their work processes and increase the amount of automated work and the overall efficiency of their operations. The rapid adoption of cloud services by a variety of small and medium-sized businesses across a wide range of industry verticals, including banking, financial services, and insurance (BFSI), retail, healthcare, manufacturing, telecommunications, and information technology (IT), and media and entertainment are creating a lucrative opportunity for the market.
The global policy management software market is segmented by component, deployment model, enterprise size, and industry vertical.
Based on components, the global policy management software market is bifurcated into solutions and services.
The solution segment dominates the market, growing at a CAGR of 15.0% during the forecast period. The market's growth is driven by an increase in the demand to monitor and manage a large number of policies, as well as an increase in the demand to manage large amounts of risk in various organizations. It is anticipated that the ability to identify, monitor, evaluate, and access various types of risks before their occurrence will boost businesses and organizations to adopt policy management solutions. In addition, the key players in the market are introducing new features integrated with policy management solutions. This development is anticipated to provide lucrative opportunities to expand the market. As they facilitate the deployment and integration of diverse IT solutions within an enterprise ecosystem, services serve as the backbone of any organization. These play an essential role in the market for policy management software, as they assist in identifying, evaluating, and controlling organizational threats. In addition, the increase in demand for cloud-based policy management services over the forecast period is expected to provide growth opportunities for the market.
Based on the deployment model, the global policy management software market is bifurcated into on-premise and cloud.
The on-premise segment is the most dominant, growing at a CAGR of 12% during the forecast period. On-premises solutions are renowned for their superior server maintenance, and continuous systems facilitate the deployment of policy management software. In addition, the on-premises deployment mode is widely valuable for large enterprises, despite requiring substantial investment to implement, as well as the purchase of interconnected servers and system management software. Compared to cloud-based solutions, the enhanced data security on-premise policy management software encourages organizations to adopt it.
Moreover, multi-tenant models are frequently used in cloud-based adoption, posing a data breach risk, leading to data misuse or manipulation, and resulting in greater adoption of on-premise models. The cloud-based policy management software incurs no upfront costs and has low maintenance requirements, making it the best option for mid-sized financial institutions. The market is primarily driven by the increasing adoption of cloud-based policy management software by both large and mid-sized businesses.
Based on enterprise size, the market is classified into large enterprises, small and medium enterprises (SMEs).
The large enterprise segment is the highest contributor to the market, growing at a CAGR of 14.7% during the forecast period. Large businesses are giving policy management and risk management more attention and focus. Organizations need a transparent enterprise policy management system to identify, assess, and manage risk effectively. In addition, the growth of data in large organizations and the need to maintain a central repository drive the growth of the market for policy management in large organizations. Increased adoption of policy management software by small and medium-sized enterprises (SMEs) to improve business efficiencies, streamline business operations, and manage delegated policies drives the market growth in this segment.
Based on industry vertical, the global policy management software market is divided into BFSI, IT and telecom, energy and utilities, healthcare, government and defense, manufacturing, and retail.
The BFSI segment is the highest contributor to the market, growing at a CAGR of 13.3% during the forecast period. Several financial institutions, including banks and FinTech companies, are concentrating on mitigating various policies to grow and remain sustainable in the market. Additionally, changes in customer expectations, cyber security threats, data privacy and compliance, and third-party risk are some of the primary factors that drive the adoption of policy management software in the BFSI industry. Due to the increase in cyber liabilities, data theft, identity fraud, and cyber-attacks against the government and defense sector, policy management is at the forefront of corporate governance in defense sector companies. In addition, strict government regulations in various nations have shifted the focus of these organizations toward adopting policy management in various governments.
The global policy management software market is segmented into four regions, namely North America, Europe, Asia-Pacific, and LAMEA.
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North America is the highest revenue contributor and is expected to reach USD 1.39 billion by 2030, growing at a CAGR of 13.7% during the forecast period. The primary factors driving the region's market growth are the insurance industry's early adoption of risk management solutions and various government initiatives to encourage insurance providers to adopt policy management software. In North America, the policy management software market is highly fragmented due to the large number of market participants engaged in various developments, such as partnerships, product launches, and collaboration.
The European region has experienced significant growth in recent years due to the increased number of strict rules and regulations that the government has placed on private and public companies in the European countries. In addition, Asia-Pacific and LAMEA are expected to exhibit promising growth.
In the global policy management software market major key players are