Disclosure Management Market Size & Share Analysis - Growth Trends & Forecasts (2023 - 2028)

Disclosure Management Market Size & Share Analysis - Growth Trends & Forecasts (2023 - 2028)

The Disclosure Management Market size is expected to grow from USD 1.03 billion in 2023 to USD 2.20 billion by 2028, at a CAGR of 16.50% during the forecast period (2023-2028).

Key Highlights

• Disclosure management software is becoming increasingly important for organizations as it offers a collaborative and flexible process that helps in cost reduction and management processes. This software provides general and industry-specific templates for preparing reports and papers, assists in delivering workflows to expedite and optimize disclosure procedures, and assists in collecting and matching data from numerous data sources.
• One of the significant purposes of disclosure management is to centralize and manage the necessary documents required in the close cycle to reduce the risk of an inaccurate disclosure significantly. This is especially important as delays and mistakes in financial reporting may have far-reaching consequences for companies and their shareholders. The US Securities and Exchange Commission (SEC) mandates have created a demand for efficient disclosure management solutions to help organizations avoid such errors resulting in massive penalties.
• The COVID-19 pandemic brought about significant changes in the assumptions used to measure the fair value of assets and liabilities, resulting in considerable differences in the valuation techniques adopted by organizations on account of changing market conditions and related observable inputs. This has led to a need for efficient disclosure management solutions to accurately assess the qualitative and quantitative evaluation of an organization's business activities, financial situation, and economic performance in their year-end financial statements.
• Overall, disclosure management software is becoming increasingly crucial for organizations to manage and reduce risk in their financial reporting processes, especially in light of the changing market conditions and increasing regulatory demands.

Disclosure Management Market Trends

Increasing Demand of Disclosure Management Software in BFSI Sector

• The BFSI vertical is projected to hold the largest market share in the forecast period as organizations within this industry use disclosure management solutions to manage their business disclosure processes efficiently. The rise of digital transformation and the growing demand for hyper-personalized products and services are prompting many companies to reconsider how they manage their disclosure process.
• In addition, distributing required disclosures in complex regulatory environments can make up more than 60% of customer communications, making effective management essential. Furthermore, the need to minimize risks and fraud that can occur through human interventions is another primary driver behind the increasing adoption of risk management solutions.
• Capgemini and Naehas joined forces to transform the disclosure management process for a large wealth and asset management company that faced challenges with disparate systems, duplicative activities, and inconsistent processes for different types of disclosures. Cycle times were long, and they had no visibility into changes that were in process. To address these issues, the Capgemini and Naehas team conducted a comprehensive current state assessment to help the company understand its problems and challenges better. They used benchmarking metrics to compare the company against clients of different sizes across the industry.
• Organizations with purpose-built cloud-based and content-driven global disclosure management software tend to have stronger regulatory compliance frameworks and governance. A recent Shared Services & Outsourcing Network report found that nearly six in ten shared services executives cite automation as a continuing priority, indicating the growing implementation of disclosure management in the studied market.

North America is Expected to Hold Major Share

• The North American market for disclosure management is expected to experience significant growth, fueled by the technologically advanced countries of the United States and Canada. The rise in demand can be attributed to the SEC mandate in the United States, which requires all public and private entities listed with it to file their reports in the eXtensible Business Reporting Language (XBRL).
• To remain competitive in the market, companies in the region must comply with industry regulations, which has led to an increasing need for disclosure management solutions. This has resulted in companies adopting the cloud deployment model and 24/7 availability of accessible information with low-cost maintenance services. Large enterprises are focusing on improving the customer experience, which is further driving demand for disclosure management solutions.
• Companies typically outsource the tagging of their XBRL reports, which adds incremental manual processes, controls, cost, and time expenditures to their efforts. These manual processes can adversely affect the quality of XBRL formatted disclosures, as recognized by the US Securities and Exchange Commission (SEC), which routinely provides feedback on common and material errors in company reports. As a result, many regional companies are opting for disclosure management solutions.
• A working paper published by the New York University School of Law examined the effects of late quarterly and annual filings on more than 2,000 companies that had never previously delayed SEC filing. They found that accounting issues are the most common reason for late filings and often determine the severity of the impact. Among the sampled companies, delayed SEC filings of Forms 10-Q and 10-K were an average of 41 days late when accounting was involved, more than three times later than the average delay due to corporate events (13 days) or uncertain reasons (11 days). These delays could be addressed by the usage of robust disclosure management solutions by the company.
• With new regulations coming into force, companies are increasingly seeking effective disclosure management solutions. The US regulators are considering tougher disclosure requirements for investment firms in response to this year's implosion of Archegos Capital Management and trading gyrations in GameStop Corp. As such, the disclosure management market in North America is poised for significant growth in the coming years.

Disclosure Management Industry Overview

The disclosure management market is moderately fragmented and highly competitive, with multiple international players such as SAP SE, Oracle Corporation, Workiva, Inc., and Certent, Inc. The companies are continually updating their existing solutions and forming partnerships to expand their geographical presence.

In December 2022, IRIS Business Services, a SaaS RegTech company based in India, launched the latest version of its financial disclosure management solution. The solution, which is part of the IRIS CARBON range of products, is Office 365-based and serves global organizations with structured financial reporting and analytics.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support