The Risk Analytics Market is predicted to reach USD 52.52 billion in 2024, reach a valuation of USD 149.82 billion by 2032, and register a CAGR of 14% during the forecast period.
Risk analytics is a sort of software that firms use to efficiently and effectively manage various types of risks. This software is notable for a number of characteristics, including the ability to recognize and manage various types of risk and take proactive efforts to avoid potential crises. The rise in various cyber-attacks, fraudulent assaults, and data theft on various businesses as a result of the ongoing digitalization trend are the primary drivers driving the global market's growth.
Some of the primary market trends projected to fuel the growth of the risk analytics market include an increase in data security breaches in companies and an increase in government regulatory compliances. Furthermore, the adoption of risk analytics in financial institutions is increasing, as is the IoT environment. Furthermore, the market's growth is fueled by an increase in the use of risk analytics in financial institutions and the expansion of the IoT environment. In addition, during the forecast period, the rise in demand from developing economies and the incorporation of artificial intelligence in risk analytics are projected to present significant potential prospects for the risk analytics market. Additionally, the growing demand for risk analytics in the banking, financial services, and insurance (BFSI) industry is being fueled by the increased use of mobile banking services and the growing volume of data. Risk analytics can combine disparate data sources into a single, unified picture, collect useful data, and provide actionable insights. Apart from that, risk analytics is used by logistics organizations all over the world to successfully respond to business disruptions and supply chain issues affected by the global spread of the coronavirus disease (COVID-19). Product and material regulatory research, data management, decision support, and compliance actions are all aided by risk analytics.
As businesses get increasingly complex, organizations are finding it more challenging to handle large amounts of data and identify potential threats. Businesses were more concerned about risk management after the financial crisis 2008, and they began investing extensively in creative solutions that can help them manage risk across the board. The growing use of vast amounts of structured and unstructured data in numerous end-user industries has increased the demand for risk analytics to manage and protect the data from risks.
Integrating data collected by companies with risk analysis tools assists organizations and management teams in identifying and classifying potential hazards and providing actionable knowledge, helping them streamline business processes. Data analytics will provide a forward-looking view of emerging risks, allowing leaders to assess these potential threats and identify and control their causes. With firms across industries adopting a rising data-driven culture, demand for such solutions is expected to increase.
The financial services industry, IT firms, and retail corporations are investing heavily in Al technology, particularly for the development of essential tasks. Al adoption has been rapid and continues to gain traction, with a large number of companies planning to incorporate machine learning and other components of the technology. All of these indicators point to Al technology disrupting the market and being a highly important resource for risk monitoring, modeling, and analytics. Similarly, businesses that use cognitive technology and artificial intelligence (AI) to forecast and proactively manage dangers will have a strategic advantage and be able to use risk analytics to improve their productivity, thus helping to increase the risk analytics market volume.
Regulatory compliance varies greatly over the world. As a result, businesses are struggling to manage compliance risk and comply with a plethora of regulatory standards that differ by region and industry. As there is no clear standard that must be followed, this is regarded as one of the restricting factors for the growth of the risk analytics market. These issues also make it tough for risk analytics solution providers to cater to diverse end-users. Organizations focus on implementing in-house regulatory standards and policies in some places where there is no regulatory structure and standard set by governing bodies.
The market's growth is hampered by the high cost of risk analytics and the difficulty of software installation and deployment. Risk analytics is made up of many modules that are used for various objectives in recognizing risk. This module allows for various customization techniques for different organizations, ensuring that it meets the organization's particular needs. The cost of implementing the program rises as a result of this modification. In addition, the program requires annual maintenance and bug-fixing costs and fees to continue utilizing the product. Furthermore, the market's growth is hampered by the software's complexity and the difficulty of installing and configuring it.
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REPORT METRIC |
DETAILS |
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Market Size Available |
2023 to 2032 |
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Base Year |
2023 |
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Forecast Period |
2024 to 2032 |
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CAGR |
14% |
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Segments Covered |
By Component, Deployment Mode, Organization Size, Risk Type, Industry, and Region |
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Various Analyses Covered |
Global, Regional, & Country Level Analysis, Segment-Level Analysis, DROC, PESTLE Analysis, Porter’s Five Forces Analysis, Competitive Landscape, Analyst Overview on Investment Opportunities |
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Regions Covered |
North America, Europe, APAC, Latin America, Middle East & Africa |
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Market Leaders Profiled |
Accenture plc, BRIDGEi2i Analytics, Capgemini, Fidelity National Information Services, Inc. (FIS), IBM, Moody’s Analytics Inc., Oracle Corporation, Risk Edge Solutions, SAP SE, SAS Institute Inc., and Others |
The software segment is expected to capture the greatest proportion of the risk analytics market in 2021, based on component. The drivers driving the market growth are expanding digitalization and business process automation, developing data silos across businesses, and escalating security and data breaches. Because of the benefits that software provides, some suppliers are considering investing in R&D to make it better and more affordable for small and medium-sized businesses. Consistent increase in the software segment, on the other hand, is likely to drive expansion in the services industry, which includes advice, installation, and support.
The cloud-based category is predicted to expand at the fastest CAGR throughout the projection period, based on deployment mode. Cloud computing and storage technologies are becoming increasingly popular among small and medium-sized businesses. Several companies are migrating to cloud infrastructure, and this trend is projected to continue in the future years. The advantages of cloud infrastructure, such as ease of acceptance, low in-house infrastructure requirements, scalability, and simple security solution installation, encourage the segment's rapid expansion.
Large enterprises dominate because effective risk management practices help large companies identify hazards associated with ongoing projects, allowing them to handle the issue before it becomes a major problem. Large organisations can use risk management systems to increase risk control, monitoring, and evaluation. Structured reports that track organisational risks can help managers and executives focus by collecting data that helps them make better risk-reduction decisions.
The financial risk segment has contributed to the largest market share due to the constant evolution of threats in the BFSI industry. Financial hazards include the danger of suffering losses as a result of failing to accomplish financial objectives. Uncertainties in international currency rates, interest rates, asset costs, stock prices, credit quality, liquidity, and company access to finance are all threats to enterprises. Advanced risk analytics tools assist banks and financial institutions in predicting consumer behavior and preferences as well as improving evaluation.
Based on end user, the BFSI category is expected to occupy the greatest proportion of the risk analytics market in 2021. The growing demand for a single view of risk across businesses and the growing need to reduce risk associated with governance and compliance requirements are driving the BFSI segment's growth. However, over the projected period, the healthcare segment is expected to develop at the fastest rate.
North America is expected to hold the biggest market share. The region's dominance can be ascribed to the industry's rising acceptance of risk-management solutions. Organizations in the region are more inclined to reshape their current risk strategies to remove risks and redundancy. In the wake of multiple cyber-attacks, for example, banks and financial institutions in the region are focusing more on controlling cybersecurity risks.
Analytics solution providers in the region are embracing advanced technologies such as robotic process automation (RPA), machine learning, and cognitive analysis. Companies are working on altering risk assessment frameworks with these technology integrations.
By automatically testing a great amount of unstructured data identifying potential dangers and allowing preventive steps, such technologies can assist SMEs and major organizations in the region enhance business efficiency.
With market volatility on the rise, businesses in the region are focusing on risk management strategies that can help them detect the various types of threats that might arise from a variety of international, economic, and technical reasons. Furthermore, risk management solutions enable businesses to protect themselves from disruptions and extreme non-compliance actions performed by the government and other regulatory agencies in the country.
Due to its high internet access and lack of protection, Asia Pacific (APAC) is an excellent setting for cybercriminals to thrive. Companies in the region have used analytics solutions as networking has increased and the pace of digital transformation has accelerated. Cyber vulnerability and data security violations are ingrained in the actions of businesses across the country, making them vulnerable to information threats regardless of their cybersecurity efforts. These attacks can result in significant losses, such as lost customers, business interruptions, or reputational damage.
As a result, businesses in the region are using risk assessment methodologies and solutions to address these issues. The Asia Pacific area has a mature and well-established risk management industry with a growing tendency toward technological advancements, offering a wide range of opportunities for risk management organizations and service providers.
IBM Security will launch a new risk-based solution in September 2020. It will assist firms in applying analytics to cybersecurity spending priorities and regular business decisions. As customers explore new technology, business investments, and process improvements, it will help them assess, prioritize, and quantify security risks.
By Component
By Deployment Mode
By Organization Size
By Risks
By Industry
By Region
Frequently Asked Questions
The increasing adoption of risk management practices across various industries, rising regulatory requirements, and the growing demand for real-time risk assessment solutions are the key factors driving the growth of the global risk analytics market.
AI technologies, including machine learning and natural language processing, are increasingly being integrated into risk analytics solutions to analyze vast amounts of data, identify patterns, and provide predictive insights, thereby enhancing decision-making processes and risk management strategies.
Emerging trends such as the integration of advanced analytics with risk management, the adoption of cloud-based risk analytics solutions, and the increasing focus on operational risk management are expected to drive innovation and propel market growth in the coming years.
Leading players in the global risk analytics market are focusing on strategic partnerships, mergers and acquisitions, product innovation, and geographic expansion to enhance their market presence, expand their customer base, and stay ahead of the competition.
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