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Risk Analytics Market

Global Risk Analytics Market: Information by Component (Software and Solution), Risk Type Application (Financial Risk, Operational Risk, Compliance Risk, Strategic Risks), Enterprise Size (Small and Medium-Sized Enterprises (SMEs) and Large Enterprises), Deployment (On-premise, Cloud), End-User Vertical (BFSI, Healthcare, IT, and Telecom), and Region—Forecast Till 2032

Report Code: SRTE55808DR
Study Period 2020-2032 CAGR 12.2%
Historical Period 2020-2022 Forecast Period 2024-2032
Base Year 2023 Base Year Market Size USD 40 billion
Forecast Year 2032 Forecast Year Market Size USD 110 billion
Largest Market North America Fastest Growing Market Asia-Pacific
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Market Overview

The global risk analytics market size was valued at USD 40 billion in 2023 and is projected to reach USD 110 billion by 2032, registering a CAGR of 12.2% during the forecast period (2024-2032). The advancement of technology, the increased accessibility of data, and the rising importance of risk management are the primary factors driving market growth.

Risk analytics systematically analyzes and measures the possible uncertainties that enterprises could encounter. Data analysis encompasses utilizing statistical, mathematical, and computational principles to evaluate the uncertainties in different business operations. By analyzing several categories of risks, including financial, operational, reputational, and strategic, this method empowers businesses to make well-informed and deliberate decisions. The goal is to understand and reduce possible adverse effects while recognizing opportunities for expansion and enhancement. This analytics field is armed with various methodologies and tools, such as models, algorithms, and simulations, which can evaluate large volumes of data to identify potential risk factors. The process entails identifying, quantifying, and analyzing risks, prioritizing, and formulating a response strategy.

The main driving force behind the global market is the growing demand for a cohesive platform that facilitates risk managers and enterprises in efficiently evaluating, computing, predicting, and alleviating risk. Moreover, the increasing demand from developing countries and the integration of Artificial Intelligence (AI) into this analysis field are expected to generate substantial prospects for software developers. Multiple suppliers in the market prioritize providing AI-integrated solutions that assist organizations in addressing rising dangers.

Highlights

  • The software generates the highest revenue share based on components.
  • Financial risk accounts for the largest market share by risk type application.
  • Large enterprises account for the largest market share by enterprise size.
  • On-premise generates the highest revenue share based on deployment.
  • BFSI accounts for the largest market share by end-user vertical.

Market Dynamics

Global Risk Analytics Market Drivers:

Technological Advancements

The rapid growth of the risk analytics market has been primarily fueled by technological improvements, which have enabled banks to achieve greater accuracy and foresight in risk management. Due to the rapid increase in processing power, banks can now quickly evaluate large amounts of data in real-time. This allows them to manage complicated risk situations with exceptional flexibility effectively. In addition, machine learning and artificial intelligence advancements have provided banks with a potent array of forecasting capabilities. In 2022, the use of AI was twice as probable in more giant corporations, and 80% of retail executives intend to employ AI to achieve automation by 2025. These advanced algorithms analyze large amounts of data, revealing complex patterns and anomalies previously tricky to find. With these valuable understandings, banks may predict and prepare for hazards before they happen, enabling them to take proactive measures to protect against any dangers.

Additionally, the introduction of sophisticated data analytics technologies has made it easier to combine and analyze many types of data streams, including structured and unstructured data and data from internal and external sources. This comprehensive method of data analysis provides banks with a complete understanding of risk variables across many aspects, allowing them to have a wide-ranging perspective on potential weaknesses and enhancing the expansion of the Risk Analytics Market. Technological advancements have fundamentally transformed the field of risk analytics, providing banks with the necessary accuracy, efficiency, and comprehensiveness to navigate the ever-changing financial landscape effectively.

Global Risk Analytics Market Restraints:

Mismeasurement of Known Risks and Complex Nature of Unstructured Data

Data collection and interpretation form the fundamental basis, and numerous firms have realized that the immense amount of data required for effectively assessing operational risks can be overwhelming. A top-down approach enables the efficient optimization of risk reduction outcomes by systematically examining each variable before identifying correlations. Risk management teams prioritize the acquisition of accurate data throughout the process. Monitoring the volume and correctness of assessment data is crucial and can be done using various techniques and models.

Furthermore, many organizations need help understanding the importance of data in identifying potential risks, particularly from a compliance perspective. Failing to recognize these risks can lead to severe implications regarding regulatory restrictions. The cost of integrating analytics technologies into corporate operations and the existence of legal barriers have hindered organizations from adopting risk management methods. In addition, it is necessary to tackle significant analytical and technological challenges when developing management methods that can effectively detect and quantify different types of risk across a wide range of corporate operations.

Global Risk Analytics Market Opportunity:

Rising Risk of Cyber Attacks

Over the years, organizations have faced challenges in safeguarding themselves against cyberattacks. Companies, colleges, and government agencies have invested significant sums to enhance security measures. However, despite those endeavors, instances of data breaches, where cybercriminals illicitly obtain personal information, persistently rise annually. Specifically, there was a 20% surge in data breaches from 2022 to 2023. Several of the patterns related to this increase are unsettling. For instance, on a global scale, the number of victims in 2023 was double that of 2022, and in the Middle East, there was a 77% increase in ransomware gang activity during that year.

Moreover, prominent cyberattacks and data breaches have heightened the general public's understanding of cyber threats. Consequently, firms face increased scrutiny and pressure to safeguard customer data, making risk analytics even more crucial. Several firms depend on third-party vendors and service providers, which can bring about significant security risks. Risk analytics enables the evaluation and control of third-party cyber risk to safeguard the organization's ecosystem. Risk analytics enables firms to optimize resource allocation by identifying critical vulnerabilities and areas of concern. This guarantees that security measures are concentrated on the most crucial regions.

Regional Analysis

North America Dominates the Global Market

The global risk analytics market analysis is conducted across North America, Europe, Asia-Pacific, the Middle East and Africa, and Latin America.

North America is the most significant global risk analytics market shareholder and is estimated to grow at a CAGR of 12% over the forecast period. The United States is projected to dominate the market in North America, resulting in the region holding the largest market share. The region's growth can be attributed to its growing utilization of risk analytics solutions in many industries, the notable presence of major corporations, and the pursuit of early technological adoption in response to competition from firms in low-cost regions. Furthermore, the widespread implementation of cloud computing in many sectors is fueling the expansion of the market. The imperative of safeguarding Healthcare Information Systems (HIS) against imminent cyber security threats has been closely linked with adopting cloud computing. Health Information Systems (HISs) data and resources are intrinsically shared with other systems to enable remote access, facilitate decision-making, support emergencies, and address many healthcare-related viewpoints.

Furthermore, the United States has seen 28 data breach instances during the pandemic year. These events encompassed email hacking, malware attacks, and illegal access to electronic health records (EHRs), as the US Department of Health & Human Services reported. Cloud computing is often considered a prompt solution in the medical healthcare industry because of its scalability and cost-effectiveness.

Asia-Pacific is anticipated to exhibit a CAGR of 12.6% over the forecast period. Several sectors, such as finance, healthcare, and telecommunications, face heightened regulatory demands in Asia; risk analytics solutions aid firms in complying with these regulations and effectively managing their risk exposure. The region's substantial economic expansion has led to a surge in investments across multiple sectors. Firms require robust risk analytics tools to evaluate and mitigate any risks associated with their activities and investments during their expansion. The financial industry in the region is experiencing considerable growth due to the increasing need for risk analytics solutions. These solutions effectively manage operational, market, and credit risks in banking, insurance, and other financial organizations. The region is experiencing significant advancements in technology and big data capabilities. This fosters a conducive atmosphere for implementing advanced risk analytics tools and methodologies to extract insights from large datasets.

Additionally, the Asia-Pacific region provides a conducive environment for cybercriminals to thrive due to widespread internet access, inadequate cybersecurity measures adopted by enterprises, increasing cross-border data transfers, and limited law enforcement efforts. The rapid growth of networking and the acceleration of digital transformation have compelled regional firms to embrace analytics solutions. Cyber vulnerability and data protection violations can be attributed to firms' actions in all sectors of the country. This makes them vulnerable to information threats, regardless of their efforts in cybersecurity. The consequences of these attacks can be significant, resulting in financial losses for affected consumers, disruptions to company operations, and damage to reputation.

Thus, to surmount these problems, regional firms are embracing risk assessment methodologies and solutions. The Asia-Pacific area boasts a mature and well-established sector that increasingly embraces technological advancements, offering various prospects for risk management organizations and service providers.

Report Scope

Report Metric Details
Segmentations
By Component
  1. Solution
  2. Services
By Deployment
  1. On-premises
  2. Cloud-based
By Organization Size
  1. Large Enterprises
  2. Small and Medium Enterprises
By Risk Type Application
  1. Strategic Risks
  2. Financial Risks
  3. Operational Risks
  4. Compliance Risks
By End-user Vertical
  1. BFSI
  2. IT and Telecom
  3. Retail
  4. Healthcare
  5. Energy and Utilities
  6. Manufacturing
  7. Government and Defense
  8. Others 
Company Profiles Accenture plc BRIDGEi2i Analytics Capgemini SE FIS International Business Machines Corporation Moody's Analytics Inc. (Moody's Corporation) Oracle Corporation Risk Edge Solutions Private Limited SAP SE SAS Institute Inc.
Geographies Covered
North America U.S. Canada
Europe U.K. Germany France Spain Italy Russia Nordic Benelux Rest of Europe
APAC China Korea Japan India Australia Singapore Taiwan South East Asia Rest of Asia-Pacific
Middle East and Africa UAE Turkey Saudi Arabia South Africa Egypt Nigeria Rest of MEA
LATAM Brazil Mexico Argentina Chile Colombia Rest of LATAM
Report Coverage Revenue Forecast, Competitive Landscape, Growth Factors, Environment & Regulatory Landscape and Trends
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Segmental Analysis

The global risk analytics market is segmented based on components, risk type application, enterprise size, deployment, and end-user vertical.

Based on components, the market is segmented into Software and Solutions.

The software segment dominated the segment in 2023. Risk software comprises advanced technological platforms capable of addressing dynamic circumstances and complexities. This software has enhanced business evaluations and optimized efficiency with human cognition and traditional analytics. Businesses and public sector organizations have made significant progress using vast amounts of internal and external data to take a more responsive approach to managing risks. Analytics software allows firms to establish a structure for evaluating risks throughout the enterprise by consolidating many types of risk data into a single integrated program. This tool provides a clear and systematic approach for decision-makers to define, assess, comprehend, and manage the risks associated with the brand.

The solution segment is the fastest growing. Risk analytics providers offer a variety of solutions, including software platforms and consulting services, designed to meet the needs of different industries and risk situations. Organizations in today's ever-changing business environment face many intricate and varied hazards. Businesses need comprehensive and bespoke solutions to confidently handle the intricacies of cybersecurity threats and regulatory compliance concerns. Rapid technological progress, including AI, ML, and big data analytics, has driven the creation of advanced Risk Analytics solutions.

Based on risk type application, the market is segmented into Financial Risk, Operational Risk, Compliance Risk, Strategic Risks, and Others.

The financial risk segment dominated the segment in 2023. The regulatory and corporate climate has become increasingly intricate and unpredictable compared to past years. Financial institutions have recently faced a variety of additional regulatory requirements. Economic risks can lead to potential losses due to the failure to achieve financial objectives. The businesses are at risk due to uncertainties surrounding international currency rates, interest rates, asset costs, stock values, credit quality, liquidity, and the company's ability to get funding. Banks and financial businesses use advanced risk analytics tools to forecast consumer behavior and preferences and improve evaluation.

The operational risks category is the fastest growing. Operational risk management is a strategic approach businesses employ to establish and enforce efficient laws and policies to mitigate practical risks. Every organization encounters diverse events or substantial alterations in its condition that may present varying degrees of danger to the business, spanning from minor inconveniences to potentially jeopardizing its existence. These analytics solutions improve the reliability of corporate operations by strengthening the decision-making process, especially in areas with a high concentration of risks.

Based on enterprise size, the market is bifurcated into Small and Medium-Sized Enterprises (SMEs) and Large Enterprises.

Large enterprises segment dominated the segment in 2023. Prudent risk management solutions empower major firms to identify and address potential dangers associated with ongoing initiatives, preventing them from escalating. Large organizations can enhance risk control, monitoring, and evaluation by implementing risk management systems. Implementing structured reports to monitor organizational risks can improve the attention of managers and executives by collecting data that enables more effective risk mitigation actions. The wide range of data, including information on key risk factors, methods of protection, and current threats, allows leadership to pinpoint the most significant risk areas. These studies can also assist leaders in developing a more precise comprehension of risk sensitivity, risk levels, and risk tolerances.

Small and medium-sized enterprises (SMEs) segment is the fastest growing. Nevertheless, they are vulnerable to several risks, including market fluctuations, sourcing, budgeting, etc. Small and medium-sized firms face numerous hazards in their regular business operations. Some of the dangers that businesses face include interest rates and foreign exchange risks. These risks could decrease their profitability and result in financial losses. Risk assessment tools create proactive methods that assist small and medium-sized enterprises (SMEs) in anticipating future risk incidents and reducing their vulnerability to risks.

Based on deployment, the market is segmented into the cloud and on-premises.

The on-premises segment holds the largest share. By implementing risk assessment tools on-site, the risk management department has direct access to the system and can closely oversee the computer network and data configuration, maintenance, and security.

The cloud segment is the second largest. Cloud-based solutions offer a range of features, such as a data mining framework, an efficient data storage platform, and risk assessment tools that assist enterprises in enhancing their operations. Cloud-based solutions are a contemporary trend that firms are adopting to improve their current solutions. These solutions offer numerous advantages compared to on-premises systems, including improved user interface, regular product upgrades, and more excellent monitoring and analysis, among other perks.

Based on end-user vertical, the market is segmented into banking, financial services and insurance (BFSI), IT and telecommunications, healthcare, retail and consumer goods, energy and utilities, manufacturing, and others.

The banking and finance segment dominated the market in 2023. Financial institutions function rigorously regulated, requiring robust risk management systems to guarantee adherence to rules and stability. Risk Analytics solutions equip these firms with the capabilities to traverse intricate regulatory environments effectively. The finance sector encounters a wide range of constantly changing hazards, such as credit, market, operational, and cyber threats. Risk Analytics provides customized solutions to accurately identify, evaluate, and minimize these risks, ensuring the protection of assets and maximizing performance. The banking and financial industry deals with large amounts of data, making it suitable for utilizing advanced analytics methods to obtain practical insights. Risk Analytics empowers these organizations to leverage the potential of large-scale data to facilitate informed decision-making and strategic risk management.

The manufacturing segment is the fastest growing. Manufacturing firms produce vast data through operations, equipment, and supply chains. Risk analytics enables the utilization of this data to make well-informed decisions and detect potential problems. Utilizing a data-driven methodology can assist in accurately forecasting and proactively mitigating interruptions. The manufacturing sector is highly dependent on intricate supply chains. Risk analytics can aid in the surveillance and reduction of risks linked to supply chain disruptions, including natural disasters, geopolitical concerns, or challenges relating to suppliers. Optimizing is essential for preserving operational efficiency.

Market Size By Component

Market Size By Component
  • Solution
  • Services
  • Recent Developments

    • May 2024– Accenture (NYSE: CAN) agreed to purchase Passionate, a data consultancy specializing in data products and modern data foundation services. These services encompass everything from the formulation of data strategies to the application of technology.
    • March 2024– Accenture (NYSE: CAN) successfully finalized its acquisition of GemSeek, a prominent provider of customer experience analytics. GemSeek specializes in helping multinational corporations gain a comprehensive understanding of their consumers using inMoody's analytics and AI-driven prediction models. The purchase highlights Accenture Song's continuous investment in data and AI capabilities to assist clients in expanding their business and maintaining customer relevance.

    Top Key Players

    Risk Analytics Market Share of Key Players

    Risk Analytics Market Share of Key Players
    Accenture plc BRIDGEi2i Analytics Capgemini SE FIS International Business Machines Corporation Moody's Analytics Inc. (Moody's Corporation) Oracle Corporation Risk Edge Solutions Private Limited SAP SE SAS Institute Inc. Others

    Frequently Asked Questions (FAQs)

    How big is the Risk Analytics Market?
    The global risk analytics market size was valued at USD 40 billion in 2023 and is projected to reach USD 110 billion by 2032, registering a CAGR of 12.2% during the forecast period (2024-032).
    North America dominates the Risk Analytics Market.
    The key players in the global market include Accenture plc , BRIDGEi2i Analytics , Capgemini SE , FIS , International Business Machines Corporation , Moody's Analytics Inc. (Moody's Corporation) , Oracle Corporation , Risk Edge Solutions Private Limited , SAP SE , SAS Institute Inc.
    Increasing Utilization of Risk Analytics in Financial Institutions and Growth of IoT Landscape are the key drivers for the growth of the market.
    The global market is segmented by component, deployment mode, organization size, applications and industry verticals.


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