Vendor Risk Management Market
Report ID: SQMIG45E2349
Report ID: SQMIG45E2349
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USA +1 351-333-4748
Report ID:
SQMIG45E2349 |
Region:
Global |
Published Date: May, 2025
Pages:
196
|Tables:
120
|Figures:
70
Global Vendor Risk Management Market size was valued at USD 11.02 Billion in 2024 and is poised to grow from USD 12.78 Billion in 2025 to USD 41.91 Billion by 2033, growing at a CAGR of 16% during the forecast period (2026–2033).
The global vendor risk management (VRM) market growth is attributable to the increased use of third-party vendors by industries. Firms are outsourcing third-party suppliers to perform significant activities, and they put themselves at risk for threats such as data breaches, regulatory failure, and reputation loss. Hence, it has become crucial to maintain robust VRM solutions that gauge, monitor, and mitigate such risks.
The rise in cyber-attacks and data breaches has put more focus on vendor cybersecurity. Companies are making investments in VRM tools to evaluate the security posture of their vendors, protecting sensitive information throughout the supply chain. Cloud-based VRM platforms are gaining traction because they are scalable, affordable, and provide real-time monitoring. As per an American telecommunication firm, Verizon's "2024 Data Breach Investigations Report," 180% of the utilization of vulnerabilities to cause data breaches in 2023 was much higher than in 2022. Of these breaches, 15% were attributed to third parties or suppliers, such as software supply chains, hosting partners, or data custodians.
How AI is Transforming Vendor Risk Management in New Era of Automation?
Automation, artificial intelligence (AI), and machine learning are leading technical transformations in the global vendor risk management (VRM) industry. The technologies enhance compliance monitoring, decision-making, and risk assessment by delivering real-time information and predictive analytics. By processing vast amounts of data, detecting possible vendor risks, and automating compliance monitoring, these AI tools save human resources and improve risk mitigation strategies for businesses across many industries.
How Startups Are Redefining Vendor Risk Management with AI?
The vendor risk management (VRM) landscape is changing fast as new companies leverage automation, artificial intelligence, and advanced analytics to enhance security and compliance. New companies are revolutionizing risk assessment and allowing businesses to manage third-party risks effectively while complying with the law through real-time monitoring, predictive analytics, and cyber risk data.
Market snapshot - 2026-2033
Global Market Size
USD 9.5 billion
Largest Segment
On-Premise
Fastest Growth
Cloud
Growth Rate
16.0% CAGR
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Global Vendor Risk Management Market is segmented by Component, Deployment Type, Enterprise Size, Vertical and region. Based on Component, the market is segmented into Solutions and Services. Based on Deployment Type, the market is segmented into On-Premises and Cloud. Based on Enterprise Size, the market is segmented into Small and Medium Enterprises (SMEs) and Large Enterprises. Based on Vertical, the market is segmented into Financial Services and Insurance (BFSI), Telecom and IT, Consumer Goods and Retail, Healthcare and Life Sciences, Manufacturing, Energy and Utilities, Government and Others. Based on region, the market is segmented into North America, Europe, Asia Pacific, Latin America and Middle East & Africa.
As per the 2024 global vendor risk management market analysis, the financial control segment dominated the market and controlled the revenue share of over 32.0%. When selecting vendors, organizations need to do due diligence to ensure that selected third-party vendors are financially healthy and capable of honoring contractual obligations. Due diligence includes reviewing the financial health, credit rating, and operational stability of potential vendors. Financial exposure for suppliers can lead to significant losses to the bottom line of the company, as well as its reputation.
The compliance management category will grow to a significant CAGR of 16.7% over the forecast period. VRM compliance management solutions are becoming integral parts of broader Enterprise Risk Management (ERM) frameworks. This merging ensures that compliance is addressed along with other risk considerations and produces an improved understanding of risks offered by vendors. When companies merge with these systems, they can identify compliance risks earlier, reduce the risk of costly compliance violations, and improve general risk mitigation strategies.
Based on the 2024 global vendor risk management market forecast, the on-premise category maintained the largest revenue share of over 66.0%. Despite the rise of cloud computing, some companies still maintain on-premises environments due to some regulatory, security, or operational requirements. Thus, on-premises vendor risk management still remains significant, especially in highly regulated sectors and organizations reliant on legacy systems.
The cloud segment is expected to experience a high CAGR over the forecast period. The global shift toward digital transformation is one of the major drivers for the growing need for VRM solutions in the cloud segment. As companies across industries such as finance, healthcare, retail, and manufacturing adopt cloud-based platforms and Software-as-a-Service (SaaS) solutions, they become increasingly dependent on third-party cloud service providers.
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The North America vendor risk management market held the largest share of about 59.0% in 2024. Cloud technologies and digital transformation are also fueling the expansion of VRM markets in North America. With companies shifting to cloud environments, they increasingly rely on third-party service providers, which raises data privacy, uptime, and service reliability issues. Cloud VRM platforms offer businesses scalability, cost savings, and real-time monitoring capabilities, which are essential to handle and mitigate cloud vendor risks.
The U.S. vendor risk management market is projected to grow significantly at a CAGR of 14.5% between 2025 and 2032. Federal and state regulations such as the Gramm-Leach-Bliley Act (GLBA), Sarbanes-Oxley Act (SOX), and California Consumer Privacy Act (CCPA) are forcing U.S. organizations to ensure their vendors comply with strict data protection, privacy, and financial regulations. The Federal Financial Institutions Examination Council (FFIEC) also mandates financial institutions to assess and monitor third-party risks in a bid to safeguard consumers' data. The fast-growing regulatory paradigms call for perpetual monitoring and assessment of vendors, a task that VRM platforms are best positioned to accomplish.
The Canada vendor risk management (VRM) market is expanding fast as firms are increasingly developing advanced technology to boost security, compliance, and operational effectiveness. With stringent regulatory cultures and growing cyber threats, Canadian companies are using AI-based technologies to assess and manage third-party risks. Royal Bank of Canada's (RBC) recent partnership with Cohere in January 2025 to develop North for Banking, a secure generative AI tool to enhance banking operations and risk management, is one such case. The introduction of such programs demonstrates the country's commitment towards vendor modernization management and ensuring efficient risk mitigations in an ever-evolving digital landscape.
The European vendor risk management market is anticipated to experience considerable growth from 2025 to 2032. Increasing awareness among European businesses about the financial and reputational implications of vendor collapses is driving VRM adoption. Companies understand that vendor underperformance, non-compliance, or cyber-breach by a third-party vendor can lead to massive financial losses, legal suits, and reputational damage. European companies are, therefore, investing in VRM solutions that allow them to recognize and deal with risks before they occur, enhance vendor relationships, and ensure supply chain continuity.
The UK vendor risk management market is set to grow at a high pace over the coming years. The growth of the gig economy within the UK has introduced new types of vendors and third-party suppliers, such as freelancers, contractors, and digital platforms. These types of vendors may pose different risk profiles compared to established suppliers, and their affiliations with organizations are more challenging to manage. With increasingly more sophisticated businesses relying on freelancers and gig workers, the need for high-quality VRM tools to assess the risks associated with these types of vendors for data security, compliance, and quality control has grown.
The Germany vendor risk management market recorded a high market share in 2024, supported by growth in the industrial and automotive industries. Germany is highly dependent on complex, multinational supply chains. Relying on suppliers and subcontractors across several geographies puts the country at risk of political instability, economic change, and natural disasters-related threats.
Asia Pacific is growing robustly at a CAGR of 17.2% from 2025 to 2032. The region is experiencing robust digital transformation, with many businesses embracing cloud-based platforms and services. China, and Japan are some of the countries driving the digital transformation, with organizations relying more and more on cloud service providers, SaaS platforms, and IT outsourcing for cost savings and efficiency of operations. While cloud adoption has numerous benefits, it also presents new risks such as data security, vendor lock-in, and compliance.
The Japan vendor risk management market will witness tremendous growth in the coming years. With Environmental, Social, and Governance (ESG) considerations gaining more prominence globally, Japanese companies are under increasing pressure from investors, consumers, and regulators to be more sustainable and responsible. Japan has also committed to becoming net-zero emissions by 2050 and is implementing ESG frameworks within corporate governance, including third-party suppliers. Japanese firms are employing VRM tools to assess the ESG performance of their suppliers to ensure that suppliers adhere to environmental sustainability, social responsibility, and good governance principles
The Chinese vendor risk management market had a large market share in 2024. The rapid technological growth of China is impacting the VRM market, and fresh solutions are emerging to tackle the growing need to manage vendor risks. Advanced blockchain technology, big data analytics, and IoT-based solutions are becoming more popular with companies to track vendor performance and offer transparency within supply chains. These technologies allow businesses to access real-time vendor operations, analyze risk factors, and make decisions on their supply relationships based on data.
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Stringent Requirements for Compliance with Regulations
Growing Threats to Cybersecurity
High Implementation Costs
Complexity in Managing Multi-Tier Vendor Networks
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With companies such as IBM, OneTrust, RSA Security, and SAP Ariba investing in AI-driven solutions for improving risk assessment, the vendor risk management market is highly competitive. To streamline vendor onboarding and compliance tracking, companies are investing in automation and predictive analytics. Strategic partnerships and acquisitions are also defining the industry, as companies bring VRM solutions into more comprehensive enterprise risk management platforms to provide complete security frameworks.
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 vendor risk management market is growing rapidly because of technological innovations, cyberattacks, and regulatory compliance. While cost and complexity continue to be impediments, cloud-based and artificial intelligence technology developments are enhancing the usability and effectiveness of vendor risk management. With more use across industrial sectors such as BFSI, healthcare, IT, and government organizations, the market will continue to grow as long as firms continue to emphasize reducing third-party risk. Automation, AI-powered risk analysis, and tighter regulations globally will predict to influence the global vendor risk management market outlook in the future.
| Report Metric | Details |
|---|---|
| Market size value in 2024 | USD 11.02 Billion |
| Market size value in 2033 | USD 41.91 Billion |
| Growth Rate | 16% |
| 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 Vendor 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 Vendor 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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With the given market data, our dedicated team of analysts can offer you the following customization options are available for the Vendor Risk Management Market:
Product Analysis: Product matrix, which offers a detailed comparison of the product portfolio of companies.
Regional Analysis: Further analysis of the Vendor Risk Management Market for additional countries.
Competitive Analysis: Detailed analysis and profiling of additional Market players & comparative analysis of competitive products.
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Innovation Mapping: Identify racial solutions and innovation, connected to deep ecosystems of innovators, start-ups, academics, and strategic partners.
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