Vendor Risk Management Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Type (Solution, Services), By Deployment Mode (Cloud, On-Premises), By Organization Size (Small and Medium-Sized Enterprises, Large Enterprises), By End User Industry (BFSI, Telecom & IT, Manufacturing, Others), By Region, and By Competition, 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 9.98 Billion
CAGR (2026-2031)	16.82%
Fastest Growing Segment	Services
Largest Market	North America
Market Size (2031)	USD 25.36 Billion

Market Overview

The Global Vendor Risk Management Market will grow from USD 9.98 Billion in 2025 to USD 25.36 Billion by 2031 at a 16.82% CAGR. The Global Vendor Risk Management (VRM) Market is defined as the strategic discipline of identifying, assessing, and mitigating risks associated with third-party suppliers and service providers throughout the entire relationship lifecycle. The primary drivers supporting the market's growth include the escalating frequency of supply chain cyberattacks, which necessitates robust external oversight to protect organizational integrity. Additionally, the expansion is heavily supported by stringent regulatory compliance mandates, such as DORA and GDPR, which enforce rigorous due diligence and continuous monitoring of external partners to ensure data privacy and operational resilience.

However, a significant challenge impeding market expansion is the complexity of maintaining visibility across increasingly intricate and multi-tiered digital ecosystems. Organizations often struggle to effectively track the security posture of numerous external applications, leading to potential vulnerabilities. According to the 'Cloud Security Alliance', in '2024', '65 percent of respondents identified tracking and monitoring security risks from third-party connected applications as the most difficult area to manage within their security posture'. This lack of transparency complicates risk mitigation efforts and may slow the adoption of comprehensive VRM solutions.

Key Market Drivers

The escalation of third-party cybersecurity threats and data breaches is significantly accelerating the adoption of Global Vendor Risk Management (VRM) solutions. As organizations expand their digital ecosystems, the attack surface widens, making external partners a primary vector for cyber incidents. This surge in vulnerability has forced enterprises to prioritize rigorous vendor vetting and continuous monitoring to safeguard their infrastructure. According to Prevalent, May 2024, in the '2024 Third-Party Risk Management Study', 61% of companies reported experiencing a third-party data breach or security incident within the preceding 12 months. Consequently, organizations are aggressively increasing their financial commitment to secure these external connections. According to BlueVoyant, November 2024, in the 'State of Supply Chain Defense: Annual Global Insights Report', 86% of organizations reported a budget increase for third-party risk management programs in 2024 to combat these persistent supply chain threats.

Simultaneously, the intensification of global regulatory compliance and data privacy mandates is compelling organizations to institutionalize comprehensive VRM frameworks. Governments and industry bodies are enforcing stricter penalties for data mishandling, necessitating automated solutions capable of maintaining audit trails and ensuring adherence to complex standards like DORA and GDPR. The financial implications of neglecting these obligations are severe, pushing enterprises to adopt robust compliance tools. According to IBM, August 2024, in the 'Cost of a Data Breach Report 2024', there was a 22.7% increase in the share of organizations paying fines of more than USD 50,000 for noncompliance compared to the previous year. This escalating cost of regulatory failure is a primary catalyst driving the deployment of sophisticated VRM platforms to ensure ongoing operational resilience.

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Key Market Challenges

The complexity of maintaining visibility across increasingly intricate and multi-tiered digital ecosystems presents a significant barrier to the Global Vendor Risk Management (VRM) Market. As organizations integrate deeper with third-party suppliers, the sheer volume of external applications creates critical blind spots that standard VRM tools often struggle to illuminate. This opacity forces businesses to question the reliability of their external risk data, as they cannot guarantee a comprehensive security posture for every connected partner. Consequently, decision-makers may delay investing in advanced VRM platforms, fearing that the tools will not sufficiently mitigate the risks inherent in such convoluted networks, thereby slowing market adoption.

Compounding this challenge is the scarcity of qualified personnel required to interpret and act upon data from these complex supply chains. Without adequate human oversight, the visibility provided by VRM tools remains actionable only in theory. According to 'ISC2', in '2024', '59 percent of cybersecurity professionals reported that skills gaps within their teams significantly impaired their ability to secure their organizations'. This operational bottleneck means that even if organizations wish to expand their VRM programs, they lack the skilled workforce to manage the associated complexity effectively, directly hampering the sector's growth.

Key Market Trends

The Integration of AI-Driven Predictive Risk Analytics is fundamentally shifting the market from reactive assessments to proactive threat anticipation. Advanced machine learning algorithms now analyze vast volumes of vendor data in real-time, enabling organizations to identify potential vulnerabilities and operational anomalies before they escalate into critical failures. This capability is becoming essential for maintaining supply chain integrity amidst rapidly evolving cyber threats, moving beyond static scorecards to dynamic, forward-looking insights. According to AuditBoard, June 2024, in the '2024 Digital Risk Report', 56% of organizations surveyed reported using AI technologies specifically to enhance threat detection within their digital risk strategies, underscoring the rapid operationalization of these predictive tools.

Simultaneously, the Convergence of Vendor Risk with Broader GRC Ecosystems is driving significant structural changes in how enterprises manage external exposure. Organizations are increasingly abandoning isolated point solutions in favor of unified platforms that integrate vendor risk data with internal compliance, security, and audit frameworks. This consolidation breaks down operational silos, ensuring that third-party insights directly inform enterprise-wide strategic decisions and resource allocation while improving cross-functional visibility. According to Hyperproof, February 2024, in the '2024 IT Risk and Compliance Benchmark Report', the adoption of dedicated third-party risk modules within integrated GRC platforms grew by 32% year-over-year, highlighting the industry's decisive move toward centralized and holistic risk management architectures.

Segmental Insights

The Services segment represents the fastest-growing category in the Global Vendor Risk Management Market due to the rising complexity of third-party ecosystems and regulatory compliance. Organizations increasingly rely on professional and managed services to integrate risk frameworks that align with guidelines from institutions like the Office of the Comptroller of the Currency. This demand is further bolstered by a need for specialized training and ongoing system maintenance which many enterprises lack internally. Consequently, companies are investing in external consultation and support to effectively mitigate vendor-related risks and ensure seamless operational continuity across their supply chains.

Regional Insights

North America leads the Global Vendor Risk Management Market, primarily due to its rigorous regulatory environment and the established digital infrastructure of its enterprises. Organizations in the region must adhere to strict oversight frameworks established by bodies such as the Office of the Comptroller of the Currency (OCC) and the Federal Reserve, compelling financial and healthcare institutions to implement comprehensive third-party risk protocols. Additionally, the widespread integration of cloud computing and complex supply chains across the United States and Canada necessitates specialized solutions to monitor vendor performance and mitigate security vulnerabilities effectively.

Recent Developments

• In October 2024, Mitratech announced the acquisition of Prevalent, a recognized leader in unified third-party risk management solutions. This strategic collaboration combined Mitratech’s existing enterprise risk platform with Prevalent’s specialized capabilities in vendor risk assessment, continuous monitoring, and resilience. The acquisition aimed to deliver a holistic risk management solution that integrates third-party risk data with broader enterprise compliance and legal workflows. By leveraging artificial intelligence and consolidating resources, the combined entity intended to automate due diligence processes and improve visibility into supply chain vulnerabilities for organizations facing increasingly complex regulatory and security challenges.
• In October 2024, ProcessUnity released a suite of AI-driven features for its Third-Party Risk Management platform to modernize risk evaluation processes and enhance efficiency. The new capabilities included Auto Inherent Risk, which utilized artificial intelligence to extrapolate risk data from a global exchange and create comprehensive risk profiles for vendors. These innovations were designed to streamline workflows for risk teams, allowing them to prioritize third-party engagements based on calculated risk levels. The update underscored the company's commitment to using advanced technology to extend the reach of risk management programs and improve the accuracy of breach prevention efforts.
• In September 2024, OneTrust announced significant new capabilities within its Third-Party Management solution to support compliance with the EU's Digital Operational Resilience Act (DORA). The company released features enabling the automated creation of registers of information, a critical requirement for financial entities to maintain resilience in their information and communication technology supply chains. These enhancements allowed organizations to screen and monitor third-party risks more effectively by integrating compliance automation directly into their vendor risk management programs. The update focused on operationalizing complex regulatory requirements and improving visibility into the digital supply chain to ensure robust operational resilience.
• In January 2024, Bitsight introduced two new capabilities to its Third-Party Risk Management portfolio to help organizations identify and mitigate vendor risks more effectively. The company launched Vendor Discovery, a tool designed to automatically identify third-party relationships and shadow IT, and Portfolio Risk Analytics, a dashboard providing a comprehensive view of exposure across a vendor ecosystem. These solutions aimed to address the growing challenge of unmonitored vendor risks and improve the speed at which security teams can detect and respond to threats, enabling enterprises to prioritize mitigation efforts based on data-driven insights into their extended supply chain.

Key Market Players

• BitSight Technologies, Inc.
• RSA Security LLC
• MetricStream, Inc.
• SAI Global Holdings Limited
• Rsam, Inc.
• IBM Corporation
• Genpact Limited
• LockPath, Inc.
• Rapid Ratings International, Inc.
• Resolver, Inc

By Type	By Deployment Mode	By Organization Size	By End User Industry	By Region
Solution Services	Cloud On-Premises	Small and Medium-Sized Enterprises Large Enterprises	BFSI Telecom & IT Manufacturing Others	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

In this report, the Global Vendor Risk Management Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Vendor Risk Management Market, By Type:

• Solution
• Services

• Vendor Risk Management Market, By Deployment Mode:

• Cloud
• On-Premises

• Vendor Risk Management Market, By Organization Size:

• Small and Medium-Sized Enterprises
• Large Enterprises

• Vendor Risk Management Market, By End User Industry:

• BFSI
• Telecom & IT
• Manufacturing
• Others

• Vendor Risk Management Market, By Region:

• North America
• United States
• Canada
• Mexico
• Europe
• France
• United Kingdom
• Italy
• Germany
• Spain
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• South America
• Brazil
• Argentina
• Colombia
• Middle East & Africa
• South Africa
• Saudi Arabia
• UAE