-The global risk & cybersecurity services market grew by over 10% in 2019
-Cybersecurity consulting equates to over a third of the entire non-cyber risk services market
-Sixty-three percent of clients say that their use of risk-related services is increasing as a result of the COVID-19 crisis...
The global risk & cybersecurity services market grew 10.4% in 2019, taking total revenues to US$72.1bn. Year-on-year growth of 13.7% (to US$18.6bn) meant that consulting growth in the cybersecurity service line far exceeded any other. High-profile data breaches, robust enforcement of data protection legislation, and a scarcity of cyber experts all drove high levels of demand for external support with cybersecurity, and this service line has now grown by over 40% (approximately US$5bn) in just three years.
This data is published today in a new report from Source Global Research, which also reveals that the large US risk & cybersecurity services market accounted for over half of all revenues in 2019, reaching nearly US$40bn. The report also says that risk consulting is likely to be one of the least impacted areas of consulting as a result of COVID-19, particularly where this work has a strong connection with technology. Almost two-thirds of clients (63%) say that their use of consultants for risk-related services is increasing as a result of the pandemic, and over half (58%) of those organisations with more than 5,000 employees say that staff shortages due to the COVID crisis are a key factor in this.
Fiona Czerniawska, Joint Managing Director at Source Global Research, said:
“Global geopolitical tensions, a rising interest in the need to manage risks relating to climate change and sustainability, and an uptick in interest in a more enterprise-wide approach to risk all contributed to solid growth in the risk services market in 2019.
The use of consultants for risk-related work is increasing as a result of the COVID-19 pandemic. The crisis has forced a widespread and rapid shift to remote working that has exposed organisations to all sorts of new risks to be managed and mitigated, and as a result, the market has seen a substantial surge in demand for the types of specialist skills rarely found in-house. However, clients’ appetite for support comes with the clear proviso that this work should be delivered remotely.”
Nick Allan, CEO at Control Risks, who was interviewed for the Source report, added:
“There’s a definite uptick in clients looking for remote working solutions, and that will continue into the recovery as we adjust to a new working normal. A lot of that work falls under cybersecurity. Because people haven’t been able to go into their offices, there have been real problems around managing sensitive data.
Growth in the financial services sector outpaces overall market performance
The sectors that performed best were those that are the most heavily regulated, namely pharma, healthcare, and financial services. The dominant financial services market grew faster than the overall market at 12.5% with revenues reaching over US$27bn. This growth was in part driven by clients seeking support with improving and automating controls and using technology to transform complex and costly risk operations.
The long-term impact of COVID on the market
The COVID crisis is subtly shifting the balance of the external support that clients are looking for, with cybersecurity and financial and operational risk topping agendas. One of the many uncertainties facing the market is whether the pandemic will change client behaviour for good. One thing most executives do agree on, however, is that the crisis will likely precipitate a shift towards the delivery of risk support as a managed service. The adoption of this model would also allow for more work to be delivered remotely, something clients are particularly keen on. Clients also expect to see more risk work being automated, both by client organisations themselves and by consulting firms.
Fiona Czerniawska, Joint Managing Director at Source Global Research, concluded:
“It’s been clear for the last couple of years that clients, frustrated by manual working, complexity, and cost, have wanted risk consulting firms to streamline their operations and make better use of analytics and technology. But it does look as though the COVID crisis will accelerate the evolution of this industry.”
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