According to a market research report "Third-Party Risk Management Market by Component (Solution (Financial Control, Contract, Operational Risk, Audit, and Compliance) and Service (Professional & Managed)), Deployment Mode, Organization Size, Vertical, and Region - Global Forecast to 2024", published by MarketsandMarkets™, the global Third-Party Risk Management (TPRM) Market size is projected to grow from USD 3.2 billion in 2019 to USD 6.8 billion by 2024, at a CAGR of 15.9% during the forecast period. .
The major factors driving the market include the increasing adoption of virtual applications; technological advancements, including automation, data analytics, and smart contracts; and soaring need to counter fraudulent activities in several verticals.
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Based on solutions, the financial control segment is estimated to lead the TPRM Market in 2019
Financial control management can be defined as a system that manages and limits the financial effects of the budget on user operations in such a way that it aligns the user toward the achievement of goals related to finances. Organizations depend on several vendors, which poses operational and credit risks for organizations. Financial control management solutions help reduce an organization's operational costs while managing and selecting a third-party or any vendor.
Better financial control provides better auditing and detection of fraudulent activities. Financial control management solutions provide managers with a proper view of the cash flow and better cost optimization for various business processes to increase the business output. Financial control management assists users to maintain and assess its debt collection period and the creditors' payment period.
Based on verticals, the BFSI vertical is expected to dominate the Third-Party Risk Management Market size during the forecast period
BFSI is one of the major adopters of TPRM solutions. It has been a highly regulated and competitive vertical that always focuses on delivering enhanced customer experience. The changing ways of the BFSI vertical are operating, increasing digitalization, and adopting advanced technologies have exposed this industry to different types of risks. The need to keep up with the changing regulatory environment and penalties associated with non-compliance has changed the way how risk is viewed and managed. These factors, coupled with the increasing challenges, such as cyber threats, third-party risks, and regulatory compliances, are expected to fuel the demand for TPRM solutions in the BFSI vertical.
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