Third-Party Risk Management Market Size

Third-Party Risk Management Market Size

Third-Party Risk Management Market size was valued at USD 6.1 billion in 2023 and is estimated to register a CAGR of over 15% between 2024 and 2032. The market involves managing risks linked to outsourcing relationships. It addresses concerns like data security, compliance, and operational continuity. TPRM leverages AI for advanced risk assessment and monitoring, ensuring compliance, data security, and operational continuity across supply chains. AI analyzes vast data sets to detect anomalies and predict potential risks, enhancing proactive mitigation strategies. This approach safeguards businesses from financial losses, regulatory penalties, and reputational damage, crucial in today's interconnected business landscape.

For instance, in March 2024, Sapphire, a cybersecurity Managed Service Provider (MSP) based in the UK, introduced a new third-party risk management (TPRM) service utilizing technology from Swiss startup Agnostic Intelligence. This AI-driven platform enables Sapphire to enhance risk scoring based on suppliers' cybersecurity maturity and deliver clients a comprehensive view of risks from all angles.
 

Increasing cybersecurity threats drive demand for enhanced third-party risk management market. With rising incidents of data breaches and cyberattacks targeting supply chains, businesses prioritize robust risk assessment and mitigation strategies. This growth propels the adoption of advanced technologies like AI and machine learning to detect vulnerabilities and monitor third-party activities in real-time. Proactive measures safeguard sensitive data, maintain regulatory compliance, and fortify organizational resilience against evolving cyber threats.
 

High implementation costs can be a significant barrier, deterring organizations from adopting advanced third-party risk management solutions. The initial expense of integrating sophisticated technologies like AI and cybersecurity frameworks, coupled with ongoing maintenance and training costs, can strain budgets. Smaller enterprises, in particular, may struggle to allocate sufficient resources, risking inadequate risk assessment and mitigation. This financial burden might lead to delayed adoption of critical security measures, leaving businesses vulnerable to potential risks. Conclusively, while robust risk management is essential, the high upfront costs need careful consideration and strategic investment planning.