Vendor Risk Management Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)

The Vendor Risk Management Market is Segmented By Type (Solution, Services), Deployment Mode (Cloud, On-Premises), Organization Size (Small and Medium-Sized Enterprises, Large Enterprises), End-user Industry (Banking, Financial Services, and Insurance, Telecom and IT, Manufacturing) and Geography.

Vendor Risk Management Industry Overview

Vendor Risk Management Market Summary
Study Period: 2018 - 2028
Fastest Growing Market: North America
Largest Market: Asia Pacific
CAGR: 14.7 %

Major Players

Vendor Risk Management Market Major Players

*Disclaimer: Major Players sorted in no particular order


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Vendor Risk Management Market Analysis

The market for vendor risk management (VRM) is expected to grow at a CAGR of 14.7% during the forecast period (2021-2026). The increasing number of third-party vendors in large as well as in small and medium enterprises, rapidly changing regulations across different regions, and need to continuously monitor and analyze vendor performance are some of the factors responsible for growing need of vendor risk management.

  • Many large businesses are discovering that their systems and processes related to VRM are not adequate from a purely business standpoint, and they might have to bear substantial damages due to poor vendor risk management framework. For instance, an average of 30,000 different parts is required to build a single vehicle, which increases the complex processes and supply chain coordination necessary to manufacture automobiles on a global scale. The supply chains, with countless third-party manufacturers and service providers, constitute a significant source of risk for manufacturers in a domino effect, which in turn, is expected to augment the need for vendor risk management.
  • For instance, in January 2020, Toyota recalled nearly 2.9 million vehicles, including 2011-2019 Corolla, 2011-2013 Matrix, 2012-2018 Avalon, and 2013-2018 Avalon Hybrid for a defect impacting airbags and seat belts. Such types of incidents might take place due to poor quality assessment management.
  • Moreover, various laws and agencies such as the Office of the Comptroller of the Currency (OCC), the Health Insurance Portability and Accountability Act (HIPAA), the Consumer Financial Protection Bureau (CFPB), the Foreign Corrupt Practices Act (FCPA), Dodd-Frank, the HITECH Act, and the Gramm-Leach-Bliley Act require enterprises to set up a robust VRM framework, driving the end-user to adopt these solutions.
  • The spread of the Covid-19 pandemic has emphasized the need for solutions that would help organizations in efficiently managing supply chains, identifying critical suppliers, and omitting any risks which are expected to augment the growth of vendor risk management solutions across various industries. The increased adoption of cloud and the need of real-time analytics are expected to proliferate the market growth.

Vendor Risk Management Industry Segments

Vendor Risk management focuses on the uncertainty, probability, and consequence of various threats to both a company’s bottom line and its ability to deliver goods and services on time. Risk management enables companies to prepare for unexpected risks resulting from third-party vendors and suppliers. VRM programs are concerned with ensuring third-party products, IT vendors, and service providers do not result in business disruption or financial and reputational damage.

By Type
Solutions (Qualitative Analysis for Sub-segments)
Vendor Information Management
Quality Assurance Management
Financial Control
Compliance Management
Audit Management
Contract Management and Others
By Deployment Type
By Organization Size
Small and Medium-Sized Enterprises
Large Enterprises
By Industry Vertical
Banking, Financial Services, and Insurance
Telecom and IT
Others (Energy and Utilities, Retail and Consumer Goods)
North America
Asia Pacific
Latin America
Middle East and Africa

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Vendor Risk Management Market Trends

This section covers the major market trends shaping the Vendor Risk Management Market according to our research experts:

BFSI is Expected to Witness Significant Growth

  • The Banking sector is, by the nature of its business, is a highly interconnected sector owing to rapidly growing third party integration, increasing connected devices, online banking, and need for faster transactions. Greater interconnectivity introduces higher cybersecurity risks, given that there are too many things to secure and monitor. The interconnected entities are likely connected to new entities, which could also be the source of cybersecurity risk.
  • Third-party vendors can often pose some serious cybersecurity risks to outsourcing banks such as financial/reputational damage, regulatory problems, operational disruptions, etc. For instance, Australian P&N Bank recently sent its customers a notification letter about a data breach that put the personal and sensitive account information of customers at risk. The bank stated that the breach occurred through its customer relationship management (CRM) platform operated by a third-party hosting firm. The information exposed included name, address, contact details, e.g., email, phone number, customer number, age, account number, and account balance.
  • According to a study conducted by Opus and Ponemon institute, organizations share confidential and sensitive information with approximately 583 third parties on average⁠ that adds up to a lot of additional risks. And only 34% of organizations in the study reported keeping a comprehensive inventory of these third parties, while just 35% rated their TPRM program as highly effective.
  • The need for vendor risk management for compliance management, vendor information management, financial control is rapidly increasing in the BFSI industry due to greater exposure and continuously changing regulations. For instance, the guidance provided by Office of the Comptroller of the Currency (OCC) in May 2020, addresses specific types of third parties such as cloud service providers, data aggregators, fintech companies, and subcontractors and how regulations to follow while conducting business with these providers.

Vendor Risk Management Market - Number of Non Cash Transactions North America, in Billion, 2019 - 2022

North America is Expected to Hold Major Share

  • The vendor risk management market in the region is proliferating owing to advanced technological developments in the field of AI, machine learning, cloud and IoT, growth of end-user industries such as BFSI, healthcare, and others, increasing levels of investments, and a growing emphasis on data security.
  • In January 2019, various banks and financial firms in the United States suffered data leak due to a third-party vendor’s fault; The data leak was caused due to misconfiguring a server where Ascension stored digital versions of paper financial documents. As a result, one could get access to a database with over 24 million credit reports containing sensitive customer information.
  • In August 2019, 2019 Annual Default Review, Supply Chain Risk Edition released by Rapid Ratings International Inc., a provider of vendor risk management solution rated 284 United States industrial firms that defaulted or filed for bankruptcy between 2014 and 2018 showed that suppliers in poor financial health have a higher probability of poor performance and bankruptcy. Out of the 37 U.S. industrial firms that defaulted in 2018, 95% had a “High Risk” or “Very High Risk” FHR at the start of the year.
  • Moreover, the region is home to many business giants who have supply chains spread on an international level such as Wallmart and Amazon among others. Thus the vendor risk management players have the opportunity to penetrate further in the region by offering advanced functionalities with the help of AI and machine learning.
Vendor Risk Management Market - Growth Rate of Geography (2020 - 2025)

Vendor Risk Management Market Competitor Analysis

The market for vendor risk management is moderately fragmented as few established players in the market have gained the majority of the market share and thus is highly competitive. The Hugh initial investment and capability to cope up with the rapidly changing technology has made it difficult for new vendors to enter the market.

  • 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.
  • 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.

Vendor Risk Management Market Top Players

  1. RSA Security LLC

  2. IBM Corporation

  3. Genpact Limited

  4. LockPath

  5. SAI Global

*Disclaimer: Major Players sorted in no particular order

Vendor Risk Management Market Concentration

Vendor Risk Management Market Report - Table of Contents


    1. 1.1 Study Assumptions and Market Definition

    2. 1.2 Scope of the Study




    1. 4.1 Market Overview

    2. 4.2 Industry Attractiveness - Porter's Five Forces Analysis

      1. 4.2.1 Bargaining Power of Suppliers

      2. 4.2.2 Bargaining Power of Buyers

      3. 4.2.3 Threat of New Entrants

      4. 4.2.4 Threat of Substitutes

      5. 4.2.5 Intensity of Competitive Rivalry

    3. 4.3 Assessment of Impact of COVID-19 on Vendor Risk Management Market

    4. 4.4 Market Drivers

      1. 4.4.1 Need for the Efficient Management of Complex Vendor Ecosystems

      2. 4.4.2 View the Risk Levels Associated With Various Tasks

    5. 4.5 Market Restraints

      1. 4.5.1 Dependence on Non-Formal and Manual Processes By Many Organizations

    6. 4.6 Market Challenge

      1. 4.6.1 Solution Integration With Existing Applications


    1. 5.1 By Type

      1. 5.1.1 Solutions (Qualitative Analysis for Sub-segments)

        1. Vendor Information Management

        2. Quality Assurance Management

        3. Financial Control

        4. Compliance Management

        5. Audit Management

        6. Contract Management and Others

      2. 5.1.2 Services

    2. 5.2 By Deployment Type

      1. 5.2.1 On-Premises

      2. 5.2.2 Cloud

    3. 5.3 By Organization Size

      1. 5.3.1 Small and Medium-Sized Enterprises

      2. 5.3.2 Large Enterprises

    4. 5.4 By Industry Vertical

      1. 5.4.1 Banking, Financial Services, and Insurance

      2. 5.4.2 Telecom and IT

      3. 5.4.3 Manufacturing

      4. 5.4.4 Government

      5. 5.4.5 Healthcare

      6. 5.4.6 Others (Energy and Utilities, Retail and Consumer Goods)

    5. 5.5 Geography

      1. 5.5.1 North America

      2. 5.5.2 Europe

      3. 5.5.3 Asia Pacific

      4. 5.5.4 Latin America

      5. 5.5.5 Middle East and Africa


    1. 6.1 Company Profiles

      1. 6.1.1 RSA Security LLC

      2. 6.1.2 Genpact Limited

      3. 6.1.3 LockPath

      4. 6.1.4 MetricStream

      5. 6.1.5 IBM Corporation

      6. 6.1.6 Resolver Inc.

      7. 6.1.7 SAI Global

      8. 6.1.8 Rapid Ratings International Inc.

      9. 6.1.9 Quantivate

      10. 6.1.10 Optiv Security, Inc.

    2. *List Not Exhaustive


**Subject to Availability
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Vendor Risk Management Market Research FAQs

The Vendor Risk Management Market is studied from 2018 - 2028.

The Vendor Risk Management Market is growing at a CAGR of 14.7% over the next 5 years.

North America is growing at the highest CAGR over 2018 - 2028.

Asia Pacific holds highest share in 2021.

RSA Security LLC, IBM Corporation, Genpact Limited, LockPath, SAI Global are the major companies operating in Vendor Risk Management Market .

Vendor Risk Management Industry Reports

In-depth industry statistics and market share insights of the Vendor Risk Management Market sector for 2020, 2021, and 2022. The Vendor Risk Management Market research report provides a comprehensive outlook of the market size and an industry growth forecast for 2023 to 2028. Available to download is a free sample file of the Vendor Risk Management Market report PDF.

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