Risk Management Software Market Size Estimated to Grow at a CAGR of 7.7% During 2021-2026

Risk Management Software Market
Governments of various countries are focusing on the development of supply chain management. There has been significant growth in Indian Logistics Sector owing to the implementation of its government initiative.

Risk Management Software Market Overview

Risk Management Software market size was valued at $10.7 billion in 2020, and it is estimated to grow at a CAGR of 7.7% during 2021-2026. Adoption of Risk Management software in various industries such as manufacturing, transportation and logistics, pharmaceuticals, and food & beverages sectors drive the market, as this software assist industries in providing equilibrium between supply and demand. Supply chain management encompasses the integrated planning and execution of processes needed to optimize the flow of materials, information, and financial capital in the areas that include demand planning, sourcing, production, inventory management and storage, transportation or logistics and return for excess or defective products. Adoption of this kind of Risk Management software assists in enhancing business processes in applications such as logistic management and enterprise risk management which helps to reduce supply chain risk. This will drive forward the Risk Management software industry. The constant advancement in technologies requires assessing various risks factors on regular basis. The risk management software market provides solutions on various platforms like Enterprise Risk Management, Financial Risk Management, Market Risk Management, and Integrated Risk Management.

Risk Management Software Market Segment Analysis – By Deployment Type

Cloud Segment held the major share around of 56.9% of global Risk Management software market in 2020. Cloud-based deployment allow industries to stay-up-to-date and aware with real time dashboard alerts. With this deployment, data can be synchronized seamlessly from multiple sources as it provides the ability to communicate and share data more easily than on-premise. Furthermore, ease of deployment, and pay per usage model have resulted in high adoption of cloud-based deployment. Blockchain will become the core technology for regulated industries such as banks and laws. Blockchain technology helps in storing the data in a decentralized and distributed manner eliminating the chances of single point of failure. The blockchain technology has the ability to identify whether the data has been manipulated. Venminder is the leading provider of third party risk management solutions. The company has raised $5 million in a Series B funding. The funding was supported by MissionOG and Bain Capital Ventures. Venminder’s SaaS based platform provides a perfect solution for all the critical processes such as contract management, risk assessment and questionnaire and task management. The company will use this fund in developing its compliance platform. The use of Artificial Intelligence (AI) in risk management will have huge impact on how financial firms handling risks. With increase in the use of AI and machine learning it said that the risk managers will shift their focus towards analytic to avoid losses.

Risk Management Software Market Segment Analysis – By Industry Vertical

Transport & Logistics is the fastest growing segment in Risk Management Software market and is estimated to grow at a CAGR 10.0% during forecast period 2021-2026. In this industry, adoption of Risk Management software for applications such as estimating shipment histories, demand forecasting, and freight in transit applications is poised to propel the market growth. The growth of the transport and logistics segment is attributed to globalization of supply chain and transport networks, which have given rise to supply chain risks such as lack of supplier visibility, extensive sub-contracting, natural disasters conflict and political unrest. Extensive subcontracting may lead to integrity related risks such as child labor or forced labor, unsafe workplace conditions, illegal worker payment. These factors have led the transport and logistics companies to focus on implementing Risk Management solutions in order to analyze risk or security assessment, failure mode and effects analysis, market condition, and map the supply chain resilience risk. Furthermore, several governments such as India, South Korea and others are focusing on adopting Risk Management solutions to identify, assess, and prioritize risks. The Government of India is undertaking significant steps to support the logistics sector. In 2019, Indian Commerce and Industry Ministry has granted a funding of $0.011k to the logistics sector for building initial infrastructure. This kind of initiative provides opportunities for the market growth.

Risk Management Software Market Segment Analysis – By Geography

North America dominated the Responsible Sourcing Software market in 2020 with a market share of 36.9%, followed by Europe and APAC owing to the early adoption of advanced digital technologies and high investments in adopting them. The presence of large number of manufacturing plants and big retail chains drives the adoption of Risk Management software. In 2018, The Federal Energy Regulatory Commission (FERC) of U.S., approved new mandatory reliability standards for protection of transportation and logistics equipment and to strengthen Risk Management in manufacturing industries. Stringent regulations in manufacturing industries and strict adherence to these regulations due to covid-19 impact in 2020 drive the market in this region.

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Risk Management Software Market Drivers

Government Initiatives in Supply Chain Management

Governments of various countries are focusing on the development of supply chain management. There has been significant growth in Indian Logistics Sector owing to the implementation of its government initiative. In 2020, the government has initiated National Logistics Policy to promote seamless movement of goods. Furthermore, the evolution of global pandemic disease has created demand for Risk Management software in order to mitigate supply chain risks in healthcare and pharmaceutical sectors and this is poised to drive the market post the pandemic as well.

Integration of Advanced Technologies

Integration of advanced technologies such as artificial intelligence (AI), machine learning (ML) with Risk Management software is poised to boost the market and add value to their customer. AI based Risk Management increased the efficiency in risk processing and can be used to streamline and automate processes such as load forecasting and vehicle scheduling. AI and ML can provide benefits to supply chain and logistics operations such as cost savings through reduced redundancies and risk mitigation, faster deliveries through more optimized routes improved forecasting, and customer service. Integration of advanced technologies with Risk Management software assist in logistic management and enterprise risk management. Increase in investments and adoption of these technologies provides lucrative opportunities for growth of the market.

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Risk Management Software Market Challenges

Data Security Issues

Enterprises that adopt Risk Management software face security and privacy issues. Enterprises hold confidential data, which needs to be protected to avoid data breaches and cyber-attacks. There are security issues in cloud deployment compared to on-premise deployment as third parties hold the enterprise data and unauthorized personnel can access it. Increase in adoption of cloud-based deployment leads to security concerns that threaten the enterprise data security and weaken business position, thereby hampering the adoption. However, investments on cyber security software for data security is analyzed to overcome this challenge.

Risk Management Software Market Landscape

Technology launches, Acquisitions, Collaboration, and R&D activities are key strategies adopted by players in the Risk Management Software market. Risk Management Software top 10 companies include SAP, Oracle, IBM, The AnyLogic Company, SAS Institute Inc, ServiceNow, RSA Security LLC, Thomson Reuters, Lockpath Inc, LogicManager Inc, and others.

Acquisitions/Technology Launches

In September 2019, AEB had launched risk assessment software solution which is used in supply chain applications. Risk assessment software provides easy online access across all companies where global trade risks potentially arise from procurement and sales to shipping. This software also ensures that all relevant information is efficiently captured and automatically used for risk management.

In March 2019, Riskmethods, a global leader in Risk Management, and Zurich Insurance Group, had entered into a strategic agreement providing Zurich’s commercial customers with new Risk Management services.

Key Takeaways

North America dominated the Risk Management software market in terms of value in 2020 owing to the early adoption of advanced software solutions and increase in investments.

Adoption of cloud deployment mode for Risk Management software implementation owing to its increased availability and high scalability drives the market.

Increasing adoption of Risk Management software in transport and logistics sector for logistic management with increasing government initiatives is set to drive the market.

Data security issues is one of the major challenges that hampers the market growth

Relevant Reports:

Governance, Compliance and Risk Software Market


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