Vendor Risk Management Market

Prevalence of third-party vendors in both public and private sector organizations fuels the market's growth

The market's CAGR for vendor risk management is being driven by the growing use of third-party vendors by both public and private sector organizations, the quickening pace of market-specific rule and regulation change, and the requirement to track, manage, and assess vendor performance. Nowadays, businesses have expended a lot of time and effort vetting the suppliers of the goods and services that satisfy their particular business needs.

The process of determining crucial vendor performance factors is sped up by VRM systems, and the deliverability, quality, and cost of the vendor's goods are used as the primary metrics for gauging vendor performance. Vendor risk management software can help professionals investigate and spot important risks when procuring goods and services from third parties if the organization interacts with a number of vendors.

Also, a large number of businesses still rely on manual methods to identify threats and are not aware of the benefits of vendor risk management services and products in reducing vendor risk, which is a factor restricting the vendor risk management market size.

The Global Vendor Risk Management Market Industry is significantly influenced by the increasing prevalence of cybersecurity threats. As organizations increasingly rely on third-party vendors, the potential for data breaches and cyberattacks escalates. This reality compels businesses to implement comprehensive vendor risk management frameworks that can identify, assess, and mitigate risks associated with third-party vendors. The urgency to protect sensitive data and maintain operational integrity is driving investments in vendor risk management solutions, contributing to a projected CAGR of 11.65% from 2025 to 2035.

The Global Vendor Risk Management Market Industry is shaped by the growing complexity of supply chains. As businesses expand globally, they engage with a diverse array of vendors, each introducing unique risks. This complexity necessitates sophisticated vendor risk management strategies to ensure that organizations can effectively monitor and manage risks across their supply chains. Companies are increasingly recognizing the need for comprehensive risk assessments and continuous monitoring of vendor performance, which is likely to drive market growth as organizations seek to safeguard their supply chains from potential disruptions.

The Global Vendor Risk Management Market Industry is experiencing heightened demand due to stringent regulatory compliance requirements. Organizations are compelled to adhere to various regulations, such as GDPR and HIPAA, which necessitate robust vendor risk management strategies. This compliance landscape drives companies to invest in advanced vendor risk management solutions to mitigate potential legal repercussions and financial penalties. As a result, the market is projected to grow from 6.46 USD Billion in 2024 to 21.7 USD Billion by 2035, reflecting a growing recognition of the importance of compliance in vendor relationships.

The Global Vendor Risk Management Market Industry is witnessing a surge in demand for enhanced operational efficiency. Organizations are increasingly aware that effective vendor risk management can lead to streamlined operations and cost savings. By identifying and mitigating risks associated with vendors, businesses can optimize their processes and improve overall performance. This realization is prompting organizations to invest in advanced vendor risk management solutions that not only address compliance and security but also enhance operational efficiency. As a result, the market is poised for substantial growth in the coming years.

The Global Vendor Risk Management Market Industry is benefiting from rapid technological advancements in risk management solutions. Innovations such as artificial intelligence, machine learning, and data analytics are transforming how organizations assess and manage vendor risks. These technologies enable businesses to automate risk assessments, enhance decision-making processes, and improve overall risk management capabilities. As organizations increasingly adopt these advanced solutions, the market is expected to expand significantly, reflecting the growing importance of technology in vendor risk management.

By Region, the study provides the market insights into North America, Europe, Asia-Pacific and the Rest of the World. A significant percentage of the market is held by the North American area as a result of the development of cutting-edge technologies in machine learning, deep learning, IoT, cloud computing, and Industrial 4.0, as well as the growing emphasis on data security and increased investment.

A result of sophisticated technological advancements in AI, deep learning, software as a service, and internet of things, the growth of end-user industries like healthcare, manufacturing, and others, an increase in invested capital, and a growing emphasis on cyber security, the region's vendor risk management market is developing.

Further, the major countries studied in the market report are The U.S., Canada, German, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.

Figure2: VENDOR RISK MANAGEMENT MARKET SHARE BY REGION 2022 (%)

Source: Secondary Research, Primary Research, Market Research Future Database and Analyst Review

Europe’s vendor risk management market accounts for the second-largest market share due to increasing reliance on third-party vendors by different organizations and adoption of advanced technologies in risk management software are expected to provide ample opportunities for the market in this region. Further, the German vendor risk management market held the largest market share, and the UK vendor risk management market was the fastest-growing market in the European region

The Asia-Pacific Vendor Risk Management Market is expected to grow at the fastest CAGR from 2023 to 2032. This is due to increasing incidents of security breaches and cyber-attacks across the region creates ample opportunities across the region. Moreover, China’s vendor risk management market held the largest market share, and the Indian vendor risk management market was the fastest-growing market in the Asia-Pacific region.

Leading market players are investing heavily in R&D in order to expand their product lines, which will help the vendor risk management market, grow even more. Market participants are also undertaking a variety of strategic activities to expand their footprint, with important market developments including new product launches, contractual agreements, mergers and acquisitions, higher investments, and collaboration with other organizations. To expand and survive in a more competitive and rising market climate, vendor risk management industry must offer cost-effective items.

Producing locally to reduce operating costs is one of the primary business strategies utilized by manufacturers in the vendor risk management industry to benefit customers and expand the market sector. Some of the most important benefits to medicine have recently been provided by the vendor risk management industry. Major players in the vendor risk management market, including IBM Corporation (US), MetricStreem (US), Lockpath Inc. (US), Logic Manager (US), Rsam (US), BitSight Technologies (US), RSA (US), Genpact (US), Resolver (Canada), SAl (Australia), Optiv (US), and others, are working to boost market demand by investing in research and development activities.

RSA (Rivest-Shamir-Adleman) is a popular public-key cryptosystem for secure data transmission. It is also among the oldest. The abbreviation "RSA" is derived from the surnames of Ron Rivest, Adi Shamir, and Leonard Adleman, who published the method in 1977. Clifford Cocks, an English mathematician, devised a comparable method in secret at Government Communications Headquarters (GCHQ), the British signals intelligence organization, in 1973. In 1997, that system was declassified.

In February 2020, RSA a firm delivering Business-Driven Security solutions to help organizations manage digital risk announced that it will be providing RSA Archer SaaS (software as a service) for customers seeking to implement the RSA Archer Suite in the cloud. The RSA Archer Suite helps organizations at any stage in their risk management maturity journey to more effectively and efficiently manage risk.

The International Business Machines Corporation (IBM), also known as Big Blue, is a multinational technology business headquartered in Armonk, New York, with operations in more than 175 countries. It specializes in computer hardware, middleware, and software, as well as hosting and consulting services spanning from mainframe computers to nanotechnology. IBM is the world's largest industrial research organization, with 19 research labs in a dozen countries. From 1993 to 2021, IBM held the record for the most yearly U.S. patents generated by a firm for 29 years.

In August 2019, IBM announced the launch of a new blockchain-powered solution aimed at mitigating supply chain risk. Trust Your Supplier, the blockchain network enables businesses to more efficiently validate and onboard their vendors while maintaining a secure audit trail of buyer-supplier interactions down the supply chain.