Vendor Risk Management Market Size

Global Vendor Risk Management Market size was valued at USD 9.5 billion in 2023 and is poised to grow from USD 11.02 billion in 2024 to USD 36.13 billion by 2032, growing at a CAGR of 16.0% during the forecast period (2025-2032). 

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.

• For instance, a better AI-powered risk management suite was launched by IBM in March 2024 to enhance security governance and third-party vendor compliance. The suite scans real-time data through machine learning to identify operational inefficiencies, cybersecurity issues, and regulatory risk. Companies can effectively prevent supply chain resilience issues and vendor-related risks beforehand with this technology.

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.

• Black Kite: Black Kite is a third-party risk management and cyber risk rating company established in 2016. Companies can effectively assess vendor security positions due to its AI-powered platform, offering real-time risk grading, actionable threat intelligence, and ongoing monitoring. By providing an extensive, automated scoring solution, Black Kite allows companies to predict vulnerabilities and reduce cybersecurity risks within their supply chains, ensuring compliance with industry regulations and best practices.

• CyberGRX: With its risk sharing platform, CyberGRX, founded in 2015, third-party cyber risk management has been transformed. Data intelligence, risk assessment, and constant vendor monitoring ensure that businesses have a means of anticipating future potential security threats. Its cross-team approach, active risk assessment, and constant vendor monitoring allow businesses to enhance supply chains' resilience and safety by minimizing the need for tedious manual processes, enhancing compliance, and improving vendor risk management.