Third Party Risk Management Market Segmentation:
Component Segment Analysis
By 2035, solution segment is set to dominate third party risk management market share of over 67.6%. A major growth driver of the segment is the rise of automated solutions with the advent of generative AI. TPRM solutions providers are leveraging machine learning solutions to advance risk monitoring. Furthermore, cloud-based solutions are gaining traction owing to their ability to provide centralized dashboards for multi-vendor engagements.
The third party risk management market analysis indicates that TPRM solutions providers who are proactively expanding portfolios to integrate AI solutions are well-positioned to be ahead of the curve in the competitive market. For instance, in July 2024, Prevalent announced the addition of multiple AI-powered threat sensing solutions to the Prevalent Third Party Risk Management Platform and offers SaaS enterprise applications. The rising opportunities in the segment are indicated by the adoption of Prevalent's SaaS solution by multiple organizations, evident by Prevalent and TBDCyber announcing a strategic third party risk management partnership in August 2024.
The services segment of the third party risk management market is poised to expand during the forecast period. The rising demand for TPRM services as a package drives the segment's growth. Businesses are demanding TPRM services in a package that will include consulting, implementation, training, managing, deployment, etc., tailored to an organization's specific needs creating lucrative opportunities for the segment's growth.
Furthermore, consulting services help businesses design effective frameworks for vendor selection and provide robust risk assessments. TRPM consulting services are positioned to find heightened demand from sectors with high-risk stakes such as the pharmaceutical sector. Key players operating in the segment are investing in acquisitions to broaden their market presence. For instance, in December 2024, Schellman & Company, LLC announced the carve-out acquisition of the TPRM practice from Connor Consulting.
End user Segment Analysis
The BFSI segment share of third party risk management market will be the largest by the end of the forecast period. A major growth driver of the increasing end use in the BFSI vertical is the rising cases of cyberattacks. Advancements in TPRM software benefit the adoption rates owing to robust risk management and security solutions provided. Furthermore, regulatory frameworks such as the Basel III require banks to meet risk-based capital ratios prompting financial institutions to manage heightened vendor diligence.
TPRM solutions providers are expanding AI capabilities to leverage the rising demand from the BFSI sector. For instance, in October 2024, the Audit board announced a robust collection of AI offerings to automate time-consuming workflows and management of risks by offering automated vendor assessments, and framework updates. Additionally, banking software companies are leveraging AI-integrated TPRM solutions for risk management. For instance, in August 2024, Treasury Prime, a leading banking software company announced a partnership with Cobalt Labs to help bank clients access new capabilities for third party risk management compliance while scaling Banking as a Service (BaaS) programs.
Our in-depth analysis of the global market includes the following segments:
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