The enterprise governance, risk, and compliance (eGRC) market is expected to register a CAGR of 12.5% in the forecast period (2021 – 2026).
Organizations operate in a complex and highly dynamic global environment. Hence, managing risk and compliance due to the impact of the changes around is one of the biggest challenges that an organization faces.
Enterprise GRC helps organizations anticipate, understand, and holistically manage their risks. As a result, organizations can balance risks and opportunities, make strategic decisions effectively, and respond efficiently to the changes occurring within and outside the enterprise.
Implementation of stringent regulations and mandates by the government across various end-user verticals has increased the need to adopt eGRC solutions that fulfill the need for compliance, audit, and risk management, etc. Around 57% of senior-level executives rank “risk and compliance” as one of the top two risk categories they feel least prepared to address.
Moreover, the rising threats amongst organizations owing to digitalization and sharing of vast data across the globe have led to different forms of cyber threats and attacks. Hence, the cybersecurity threat is one of the critical drivers for eGRC software adoption. The increasing need for efficiency in financial assessment and cost-saving solutions is expected to fuel the market growth.
However, lack of awareness about the various benefits of eGRC, especially in small and medium businesses, has hindered market growth. Furthermore, continuous changes in the company’s code of conducts and organizational structures are likely to curb market growth. For instance, only 36% of organizations have a formal enterprise risk management (ERM) program.
Risk management expected to emerge as the largest software category:
- Risk management is expected to account for the highest market share in terms of overall revenue amongst the other software solutions in the eGRC market. Risk management helps enterprises avert breaches and make sure that any risk associated with the activities of the enterprise is identified and addressed in a way that supports the organization’s business goals.
- According to the Risk Management Association, the most significant risk management challenges in 2018 were an operational risk (including cyber and third-party risks); regulatory compliance; and credit. As a result, a substantial increase in expenditure was observed owing to regulatory compliance.
- eGRC help organizations manage risk across an enterprise and prepare safeguards those against risks. By having the exact mechanisms in place to identify, manage, measure, and anticipate risks, executive management can develop policies and institute procedures to minimize risks and their impacts.