Operational Risk Management Solution Market Analysis and Forecast to 2031: By Deployment Type (On-Premise, Cloud-Based), Enterprise Size (Large Enterprises, SMEs), and Region

Operational Risk Management Solution Market Analysis and Forecast to 2031: By Deployment Type (On-Premise, Cloud-Based), Enterprise Size (Large Enterprises, SMEs), and Region

The global operational risk management solution market was valued at US$ 1.7 billion in 2021 and it is anticipated to grow up to US$ 3.6 billion by 2031, at a CAGR of 8.1% during the forecast period.

Operational risk management solutions enable an organization to develop and implement strategies to effectively manage the risk of loss resulting from inadequate or failed internal processes and systems. Operational risk management solutions are the new differentiator. Digitally transforming and integrating operational risk management (ORM) strategies, processes tools provide plant leaders with intelligence to navigate risks, maintain governance controls, and drive continuous performance improvements. Additionally, ORM software solution helps create an automated, repeatable risk assessment system that mitigates human error factors or external events.

Market Drivers and Trends

Over the past few years, the financial sector has emerged and grown rapidly. For instance, according to the article published by the Milan Fintech Summit, the number of global fintech startups tripled in the past 2 years, increasing from over 12,200 in 2019 to 26,000 in 2021. Also, due to the continuous technological changes and innovation, new risks are constantly emerging in the fintech companies, such as merchant risk, fraud risk, regulatory risk, countering terrorist financing anti-money laundering, credit risk, data privacy, consumer risks, and outsourcing risk. All these risks can be effectively handled with the help of operational risk management solutions. The increase in the new fintech companies has also increased the risks and challenges, which must be appropriately addressed as they may represent themselves in several types. The rapid pace of innovation not only poses difficulties to the financial companies but also to the regulators. Several companies providing operational risk management solutions for fintech companies include MetricStream, CURA Software Solutions, CAREWeb, and SAP SE. Further, in August 2021, HDFC Bank (India’s largest private sector bank) adopted Bloomberg’s multi-asset risk management system in its technology stack, preparing to transition to risk-free rates (RFR). Therefore, the increasing adoption of operational risk management solutions in fintech companies due to multiple benefits supports the growth of the global operational risk management solution market.

Market Restraints and Challenges

Operational risk is the essential business risk that organizations must manage effectively. Several companies face common challenges that prevent them from harnessing the benefits of ORM, such as aligning ORM strategy with the overall enterprise risk management (ERM) strategy, failure to detect new risks, continued use of legacy technologies applications, and lack of resources poor communication. Further, the ORM program should provide an accurate risk profile picture. However, a lack of consistent methodologies to measure operational risk can prevent the program from doing so. Further, when ORM is a function that reacts to regulations and compliance, it can become disjointed, manual, and ineffective. Thus, complexities associated with operational risk management solutions are acting as a restraining factor for the global operational risk management solution market.

Global Operational Risk Management Solution Market Segmental Overview

The report analyses the global operational risk management solution market based on deployment type, enterprise size, and region.

Global Operational Risk Management Solution Market by Deployment Type

Based on deployment type, it is bifurcated into on-premise and cloud-based. The cloud-based segment is expected to have the largest operational risk management solution market share in 2021. Over the years, the demand for cloud-based systems is expected to grow substantially due to the cloud-based operational risk management solution offering enhanced flexibility, scalability, and security to its users. Further, it allows the end users to receive automatic software updates without additional capital expenditures, improving technology competitiveness. Due to these factors mentioned above, the cloud-based operational risk management solution is expected to receive the main market attraction resulting in market growth.

Global Operational Risk Management Solution Market by Enterprise Size

Based on enterprise size, it is bifurcated into large enterprises and SMEs. The large enterprises segment is expected to be the largest segment in the operational risk management solution market in 2021. Due to the increasing expansion of large banks globally is supporting the market growth. Further, in August 2019, according to the article published by the Zinnov, Large enterprises form the backbone of the Indian economy and contribute revenues equivalent to as much as 40% of the country’s gross domestic product (GDP). Thus, large enterprises segment is likely to hold the major share of the market in 2021.

Geographical Analysis of Global Operational Risk Management Solution Market

Region-wise, it is studied across North America, Europe, Asia Pacific, and the Rest of the World. The North America market is expected to hold the majority of the market share in 2021. North America has the presence of several prominent ORM market players, delivering advanced solutions to all the industry verticals in the regions. Apart from this factor, the geographical presence, partnerships, strategic investments, and significant research development activities contribute to the hefty deployments of effective solutions. Such factors are expected to fuel the growth of the operational risk management solution market in North America. This, in turn, boosts the demand for operational risk management solutions in the North American region.

Major Players in the Global Operational Risk Management Solution Market COVID-19 Impact

The COVID-19 pandemic had forced companies to adopt work-from-home trends. In 2020, the COVID-19 pandemic created an enormous challenge for global businesses to continue operating despite massive shutdowns of offices and other facilities. The changing nature of working style affected information technology (IT) security. Therefore, organizations witnessed an increased risk of cyberattacks due to the extensive use of open-source software or apps, such as zoom and skype, during remote working. Furthermore, the surge in digital traffic presented an opportunity for numerous online frauds, phishing attacks, denial of inventory, and ransomware attacks. Due to the increased risk of cybercrimes, enterprises look for advanced operational risk management solutions to detect and manage any abnormal behavior in the networks. Thus, the growing remote working facility is rising the global operational risk management solution market growth.

Similarly, in 2021 and 2022, the demand for operational risk management solutions increased due to enterprises' rising trend of hybrid working styles. The digital transformation of businesses in several industries such as BFSI, pharmaceutical, and transportation logistics support the growth of the global operational risk management solution market.

Recent Developments

• November 2021, MetricStream had been awarded the Operational Risk Solution of the Year as part of the Risk.net Asia Risk Awards and Technology Awards 2021. MetricStream’s recognition by Risk.net, the world’s leading source of in-depth news and analysis on complex markets, follows significant momentum with its recent ESGRC release and Brazos product launch.
• April 2021, MetricStream had launched its Arno software release, which includes several features and innovations added to its platform and products. To enhance the MetricStream Platform, a few new capabilities have been added to enterprise operational risk management, internal audit management, IT cyber risk management, third-party risk management products, and policy compliance management. This launch sets a new standard for governance, integrated risk management, and risk compliance, enabling organizations to leverage risk as a strategic advantage.

Frequently Asked Questions

Q1. How big is the operational risk management solution market?Ans. The global operational risk management solution market size was US$ 1.7 billion in 2021 and is anticipated to reach US$ 3.6 billion in 2031, growing at a rate of 8.1% from 2022 to 2031.Q2. What is the operational risk management solution market growth rate?Ans. The growth rate of the operational risk management solution market is 8.1% from 2022 to 2031.Q3. Which region holds a major market share for the operational risk management solution market?Ans. North America holds a major market share of the operational risk management solution market in 2021.Q4. Which segment accounted for the largest operational risk management solution market share?Ans. Based on deployment type, it is bifurcated into on-premise and cloud-based. The cloud-based segment is expected to have the largest operational risk management solution market share in 2021.Q5. Who are the key players in the operational risk management solution market?Q6. What are the factors driving the operational risk management solution market growth?Ans. The major factor driving the growth of the market is adoption of operational risk management solutions in fintech companies.Q7. What are the key growth strategies of operational risk management solution market players?Ans. The key growth strategies of operational risk management solution market players are product launch, partnerships, and government initiatives.Q8. Which region will provide more business opportunities for the operational risk management solution market during the forecast period?Ans. The Asia Pacific region will provide more business opportunities for the operational risk management solution market during the forecast period.

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