Third-Party Risk Management Market
Report ID: SQMIG45D2141
Report ID: SQMIG45D2141
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Report ID:
SQMIG45D2141 |
Region:
Global |
Published Date: May, 2025
Pages:
182
|Tables:
116
|Figures:
72
Global Third-Party Risk Management Market size was valued at USD 9.54 Billion in 2024 and is poised to grow from USD 11.11 Billion in 2025 to USD 37.44 Billion by 2033, growing at a CAGR of 16.4% during the forecast period (2026–2033).
The global third-party risk management (TPRM) market share is growing robustly due to the increasing sophistication of business ecosystems and the increasing level of cyber threats. Organizations are recognizing the requirement to analyze and oversee risks concerning their third-party relationships to ensure the security and compliance of their businesses. The market is characterized by the application of sophisticated technology such as AI and machine learning in risk assessment, and a growing emphasis on regulatory compliance.
In addition, the global third-party risk management market growth is fueled by rising awareness among firms of how crucial comprehensive strategies for managing risk are, and accordingly, how they are increasingly investing in TPRM solutions. The solutions have end-to-end functions, such as initial vendor scoring and onboarding, as well as ongoing monitoring and compliance management, such that organizations can be confident of having a nimble and secure operating environment. For instance, In June 2024, Citigroup announced an example of escalated investment in third-party risk management (TPRM) software in that it indicated it would reduce its reliance on external IT contract workers from 50% to 20% and hire on thousands of permanent IT staff. This strategic effort was aimed at addressing regulatory penalties related to data governance and controls, reflecting a broader commitment to enhancing internal abilities and third-party risk management processes.
How AI is Transforming Third-Party Risk Management?
The addition of artificial intelligence (AI) to the third-party risk management (TPRM) sector is bringing about a shift in the way businesses scan and manage risks associated with their partners and suppliers. Artificial intelligence-based solutions possess the ability to automate manually conducted risk assessment, detect potential vulnerabilities, and offer real-time monitoring. This allows for organizations to make better decisions about their outside interactions. Due to this change in technology, risk management methods are becoming increasingly effective and efficient, human mistakes are diminishing, and compliance with industry standards is increased.
Market snapshot - 2026-2033
Global Market Size
USD 8.2 billion
Largest Segment
Solution
Fastest Growth
Services
Growth Rate
16.4% CAGR
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Global Third-Party Risk Management Market is segmented by Component, Service, Deployment Mode, Organization Size, Verticals and region. Based on Component, the market is segmented into Solution. Based on Service, the market is segmented into Professional and Managed. Based on Deployment Mode, the market is segmented into Cloud and On-premises. Based on Organization Size, the market is segmented into Small and Medium-sized Enterprises (SMEs) and Large Enterprises. Based on Verticals, the market is segmented into BFSI, IT and Telecom, Healthcare and Life Sciences, Government, Defense, and Aerospace, Retail and Consumer Goods, Manufacturing, Energy and Utilities and Others (Includes Education; Travel and Hospitality; Transportation and Logistics; and Media and Entertainment). Based on region, the market is segmented into North America, Europe, Asia Pacific, Latin America and Middle East & Africa.
As per the 2024 global third-party risk management industry analysis, the solution segment led the market with over 59% share of the global revenue. This is because of the increasing adoption of advanced technological solutions that offer robust risk assessment, real-time monitoring, and compliance management capabilities. Organizations are shifting towards these integrated solutions to manage and mitigate risks from their extended networks of vendors, suppliers, and partners effectively. Growing cyber risks and strict regulatory requirements have additionally spurred the necessity for sophisticated TPRM solutions that provide real-time data and active risk management controls.
The services category is also going to witness significant expansion in the during the projection period. Companies are seeking out dedicated service providers that can help implement effective TPRM models, conduct thorough risk assessments, and offer continuous surveillance and compliance. This reliance results from the desire to have specially tailored solutions capable of addressing singular risk profiles as well as sector-specific regulatory obligations.
Based on the 2024 global third-party risk management market forecast, the cloud segment had the largest market revenue share. Cloud-based TPRM solutions are preferred by organizations since they offer ease of integration, updating in real-time, and remote accessibility, thus improving risk management processes. The growth in remote working and digital transformation initiatives further boosted the adoption of cloud-based platforms as firms attempted to have efficient risk management processes within a decentralized work environment. Cloud solutions also enable advanced data analysis and AI-driven risk assessments, providing organizations with more profound insights and improved forecasts of likely third-party risk.
The on-premises segment is predicted to gaze upon huge growth in the next few years. Most organizations, particularly those in highly regulated industries such as finance and healthcare, preferred on-premises solutions to maintain direct control over their data and risk management strategies. This is driven by the need to meet strict regulatory requirements and realize optimum levels of data security, which on-premises deployments can guarantee.
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As per the 2024 third-party risk management market regional analysis, the North American market dominated with a revenue share of more than 38.0%. The region possesses numerous large firms and financial institutions that possess vast third-party networks and, consequently, face sophisticated risk management requirements. Additionally, the region's strong emphasis on data security and privacy, along with its high investments in technology, including AI and ML, enhances its ability to manage and react to third-party risks.
The third-party risk management market in the U.S. will increase at a CAGR of 13.6% over the forecast period due to its heavy density of multinational enterprises, high need for regulatory compliance, and heavy focus on security. The long and complex networks of third-party providers in the nation demand effective risk management platforms to ensure regulatory compliance and deter possible security threats.
The Canadian third-party risk management industry is being propelled by the increasing regulatory demands and escalating supply chain complexity in several industries, such as the government sector, healthcare, and finance. The regulations in the country safeguarding the privacy of information, such as the Personal Information Protection and Electronic Documents Act (PIPEDA), also underscore the necessity of end-to-end solutions to transaction risk management. Today, increasing numbers of companies are shifting to cloud-based TPRM solutions as a means to enhance their data protection and ensure that they remain compliant with international laws.
The European third-party risk management market is expected to witness high growth over the forecast period. Europe's diverse and intricate business environment, coupled with increasing cyber-attacks, has driven the demand for advanced TPRM solutions. The interest of the region in safeguarding sensitive information and managing third-party affiliations effectively has positioned it as a frontrunner in the market.
There are stringent regulatory frameworks, like GDPR, that have positioned the United Kingdom as a top contender in the European TPRM market. Strong risk management systems are becoming increasingly important to businesses as a means of avoiding fines and staying compliant. There has been growth in the use of third-party vendors because of the quick digital transformation that has been witnessed across various industries such as banking, insurance, and healthcare. This has led to a surge in the need for sophisticated TPRM solutions that can provide real-time monitoring and risk assessment capabilities.
The French third-party risk management market is expanding directly due to the increased adoption of global supply chains, especially in the industrial and tech industries. Firms have been urged to invest in TPRM solutions because of the country's eminent emphasis on cybersecurity, adoption of the European Union's NIS Directive, and General Data Protection Regulation (GDPR). Growth in demand for third-party risk management solutions powered by artificial intelligence and cloud-based is being propelled by the digital transformation program dissemination and the high priority given to risk mitigation tactics.
One of the most important nations to implement third-party risk management solutions is Germany, whose manufacturing and industrial sectors are dominant. There has been an increasing demand for efficient vendor risk management techniques as a result of the proliferation of data-driven risk assessments and the adoption of the EU's data privacy laws. With an eye on data protection and compliance with national and European laws, such as the General Data Protection Regulation (GDPR), organizations are using artificial intelligence and machine learning to evaluate third-party risks from their suppliers in real-time.
The third-party risk management market in Asia Pacific is anticipated to experience considerable growth over the forecast period due to its rapidly developing economies, expanding digital ecosystems, and growing regulatory focus. As businesses in the region are expanding and adopting rising levels of third-party services, risk management solution effectiveness is being highly pursued. Along with increased levels of cyberattacks and data breaches, organizational institutions are employing cutting-edge TPRM solutions. Additionally, regional market forces diversifying with significant investment within digital networks is adding further towards compellingly needed risk management.
South Korea's third-party risk management offerings are in rising demand because of supply chains' complexity growth in industries such as manufacturing, automotive, and electronics. Additionally, the nation's cybersecurity emphasis and advanced digital infrastructure make it the most embracing market of risk management technology based on artificial intelligence. The use of TPRM platforms is becoming more and more the standard for companies to guarantee compliance with data protection laws and to review the risks involved in new and existing business with third parties.
The growth of the TPRM market in Japan can be attributed to the high reliance of the country on foreign suppliers as well as its great emphasis on cybersecurity in most sectors, including manufacturing, finance, and automotive. The rise in the adoption of sophisticated risk management systems is being fueled by increasing digital transformation projects as well as increased sensitization to third-party risks in the context of global supply chains. Japanese firms are being prompted to make investments in TPRM solutions for enhanced compliance and risk mitigation given the stringent regulatory environment when it comes to data privacy in Japan.
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Increasing Threats to Cybersecurity
Strict Compliance with the Regulations
High Costs of Implementation
Issues About Data Privacy
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The global third-party risk management market is highly competitive, with major players focusing on establishing strategic partnerships, acquiring businesses, and improving technically to gain more market share. To provide TPRM systems that are more efficient and reliable, companies are incorporating artificial intelligence, machine learning, and cloud solutions. As an example, leading firms are widening their service capabilities to include compliance management, supply chain risk analysis, and integration of cybersecurity. Moreover, they are adding real-time risk monitoring features to their platforms.
SkyQuest’s ABIRAW (Advanced Business Intelligence, Research & Analysis Wing) is our Business Information Services team that Collects, Collates, Correlates, and Analyses the Data collected by means of Primary Exploratory Research backed by robust Secondary Desk research.
As per SkyQuest analysis, the third-party risk management (TPRM) market outlook is expected to experience significant change because of the growing number of cyberattacks, the strict regulatory needs, and the adoption of sophisticated technologies like artificial intelligence and machine learning. However, challenges like high deployment expenses and data privacy fears arise, companies are quickly implementing TPRM solutions to guarantee compliance with laws and provide protection for their suppliers. The sector will keep changing, and cloud-based options and real-time monitoring will play a larger role in protecting against potential risks. The need for end-to-end risk management techniques will become increasingly essential as the pace of digital evolution accelerates, and TPRM solutions will serve as the backbone of corporate resilience due to it.
| Report Metric | Details |
|---|---|
| Market size value in 2024 | USD 9.54 Billion |
| Market size value in 2033 | USD 37.44 Billion |
| Growth Rate | 16.4% |
| Base year | 2024 |
| Forecast period | 2026-2033 |
| Forecast Unit (Value) | USD Billion |
| Segments covered |
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| Regions covered | North America (US, Canada), Europe (Germany, France, United Kingdom, Italy, Spain, Rest of Europe), Asia Pacific (China, India, Japan, Rest of Asia-Pacific), Latin America (Brazil, Rest of Latin America), Middle East & Africa (South Africa, GCC Countries, Rest of MEA) |
| Companies covered |
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| Customization scope | Free report customization with purchase. Customization includes:-
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Table Of Content
Executive Summary
Market overview
Parent Market Analysis
Market overview
Market size
KEY MARKET INSIGHTS
COVID IMPACT
MARKET DYNAMICS & OUTLOOK
Market Size by Region
KEY COMPANY PROFILES
Methodology
For the Third-Party Risk Management Market, our research methodology involved a mixture of primary and secondary data sources. Key steps involved in the research process are listed below:
1. Information Procurement: This stage involved the procurement of Market data or related information via primary and secondary sources. The various secondary sources used included various company websites, annual reports, trade databases, and paid databases such as Hoover's, Bloomberg Business, Factiva, and Avention. Our team did 45 primary interactions Globally which included several stakeholders such as manufacturers, customers, key opinion leaders, etc. Overall, information procurement was one of the most extensive stages in our research process.
2. Information Analysis: This step involved triangulation of data through bottom-up and top-down approaches to estimate and validate the total size and future estimate of the Third-Party Risk Management Market.
3. Report Formulation: The final step entailed the placement of data points in appropriate Market spaces in an attempt to deduce viable conclusions.
4. Validation & Publishing: Validation is the most important step in the process. Validation & re-validation via an intricately designed process helped us finalize data points to be used for final calculations. The final Market estimates and forecasts were then aligned and sent to our panel of industry experts for validation of data. Once the validation was done the report was sent to our Quality Assurance team to ensure adherence to style guides, consistency & design.
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