Enterprise Governance, Risk Management, and Compliance
(EGRC) is a vital aspect of any organization, as it ensures that the company is
operating in compliance with laws and regulations, minimizing risk, and
promoting effective governance practices. This essay will explore the concept
of EGRC and its significance in the business world.
EGRC refers to the integrated framework of governance, risk
management, and compliance practices that organizations use to achieve their
objectives while maintaining legal and ethical standards. In simpler terms, it
is the process by which an organization aligns its strategies, processes, and
activities with its goals and objectives, while ensuring compliance with
applicable laws and regulations and minimizing risk.
The importance of EGRC lies in its ability to enhance the
overall performance of an organization by improving decision-making, mitigating
risks, and ensuring regulatory compliance. By implementing effective EGRC
practices, organizations can ensure that their operations are aligned with
their strategic objectives and that they are operating within legal and ethical
boundaries. This not only enhances the organization's reputation but also reduces
the risk of legal or financial penalties that could result from non-compliance.
Effective EGRC practices are essential in today's business
world, where organizations face an increasing number of risks, both internally
and externally. Internal risks may include financial fraud, data breaches, or
conflicts of interest, while external risks may include changes in regulations,
geopolitical events, or market disruptions. By implementing effective EGRC
practices, organizations can identify and mitigate these risks, protecting
themselves from potential losses and reputational damage.
In conclusion, EGRC is a critical aspect of any
organization's operations, as it helps to ensure regulatory compliance,
mitigate risks, and promote effective governance practices. Organizations that
implement effective EGRC practices can benefit from enhanced performance,
improved decision-making, and reduced risk of legal or financial penalties. As
such, it is essential for organizations to prioritize EGRC and invest in the
necessary resources to implement effective practices.
The eGRC market is influenced by several driving factors,
such as the implementation of more stringent compliance mandates, the
integration of AI/ML and blockchain technologies into GRC solutions, and the rise
in data and security breaches. However, the different structures of regulatory
policies have proven to be a hindrance to the market's growth.
The COVID-19 pandemic has expanded the market scope for
digital technologies due to the national lockdowns in each country. As a
result, many users have transitioned to remote work, consumers have shifted to
online platforms for purchases, and businesses have started utilizing online
platforms to sell their products and services. However, the use of BYOD, mobile
devices, and other connected devices to access various applications has led to
increased vulnerability to cyberattacks. Nearly all businesses, approximately
92%, have some level of digital exposure. For example, the Saudi app 'Dalil'
exposed the personal information of over five million users.
Therefore, eGRC solution vendors and providers are expanding
their presence in different regions. With the pandemic's end, the adoption of
digital technologies increased even further. This rise in digitalization has resulted
in the adoption of eGRC services across various industries in the region. These
industries have begun using eGRC solutions to meet internal audit requirements,
comply with regulations, manage third-party risks, and prevent money
laundering. Market players are seeking these solutions to expand their existing
customer base and increase their influence across the region.
Enterprise Governance, Risk Management, and Compliance
(eGRC) Market Dynamics
Driver: Increase in
Strict Compliance Mandates
The demand for eGRC solutions is on the rise due to the
increasingly complex regulatory environment and the need for organizations to
comply with various regulations. Compliance with regulations such as COBIT,
Sarbanes-Oxley Act (SOX), Federal Financial Institutions Examination Council
(FFIEC), General Data Protection Regulation (GDPR), and other federal and state
mandates is critical for organizations to avoid losses. Failure to comply with
these requirements can lead to high business losses in the form of penalties.
The introduction of GDPR, which aims to provide greater control over access to
personal data of European citizens, has impacted businesses worldwide that deal
with European clients. Adhering to regulations and compliance requirements is
becoming an arduous task for enterprises, given the added pressure of facing
severe penalties for non-compliance. By deploying eGRC solutions, businesses
can meet various regulatory requirements and avoid losses. These solutions
automate several processes related to compliance requirements, freeing up
resources to focus on other tasks such as building strategies. Thus, the need
to comply with various regulations is driving the adoption of eGRC solutions
globally.
Restraint: Varying Structures
of Regulatory Policies
Regulatory policies vary from nation to nation and from
industry to industry, with several countries lacking a designated authority to
oversee these regulations. The regulation of policies requires consideration of
various micro-economic risk factors and business requirements, which differs
from region to region. This lack of clear standards and differences in
regulatory structures make it challenging for eGRC solution providers to cater
to various end-user requirements. In regions with no regulatory structure and
standard imposed by governing bodies, organizations focus on executing in-house
regulatory guidelines and policies. This factor restrains the growth of the
eGRC market.
Opportunity:
Expansion through acquisitions and partnerships
The eGRC market has experienced significant growth in recent
years due to the increasing adoption of eGRC solutions. To maintain their
competitive position and keep up with changing client needs, different vendors
in the market are implementing organic and inorganic strategies. Both major
corporations and smaller vendors are entering into partnerships and engaging in
acquisitions to improve their market position. Many vendors are concentrating
on acquisition strategies to bolster their product portfolio and broaden their
presence in the eGRC market.
Challenge: Delivering
comprehensive eGRC solutions
Organizations are focused on providing services to various
industries such as BFSI, healthcare, legal, retail, and e-commerce. These
organizations aim to develop solutions that can meet the unique requirements of
these industries. However, the main challenge hindering growth is providing an
integrated eGRC solution that can fulfill the diverse business needs of these
industries. This solution must incorporate risk management, mandates, and
compliance for end-users in various industries and assist them in navigating
the complexities of changing business requirements. Producing such a solution
is a complicated task since each industry has distinct regulatory and
compliance requirements that must be followed. However, with technological
advancements and an increased business focus on developing innovative
solutions, vendors are anticipated to concentrate on creating an integrated
solution that can cater to customer requirements in the eGRC market.
During the forecast period, the regulatory and compliance
solution type holds the highest market size in the eGRC ecosystem. This segment
consists of regulatory management, compliance management, policy management,
privacy management, and investigation & case management solutions. The
growing demand for regulatory and compliance solutions is attributed to the
need for compliance with regulatory and reporting requirements. Non-compliance
can result in higher penalties and severe financial losses. Thus, enterprises
focus on deploying systems that help manage these requirements and ensure
compliance-related tasks are completed. Vendors offering regulatory &
compliance solutions include Quantivate, SAI Global, MetricStream, SAP, Thomson
Reuters, and SAS.
In terms of business function, the IT segment is projected
to grow at the highest CAGR during the forecast period. The IT department faces
various challenges related to technology risks and compliance. IT GRC solutions
offer a framework for decision-makers to ensure that IT programs align with the
organizational strategic objectives. These solutions help organizations
standardize and manage policies and controls that can impact organizational
risks. The increase in the CAGR rate of the IT segment is attributed to the
need to integrate compliance and IT functions to help businesses tackle the
impact of the pandemic. Also, the work-from-home approach has increased
exposure to technology risks, leading to a focus on IT GRC initiatives by
enterprises to create a competitive business environment and mitigate threats
such as cyber-attacks and data loss that can lead to significant business
losses.
The eGRC market is predicted to experience a larger compound
annual growth rate (CAGR) in the healthcare segment. This growth is due to the
pressure on the healthcare industry to perform better while reducing overall
costs and complying with various regulations to avoid penalties. Compliance
with the Health Insurance Portability and Accountability Act (HIPAA) is
required for healthcare providers to ensure data privacy and security for
protecting medical data. Therefore, vendors like SAI Global, LogicManager, and
LogicGate offer eGRC solutions designed to support healthcare providers and
meet industry standards like HIPAA, HITECH, ISO, and NIST. The pandemic has
resulted in changes to the regulatory environment in the US, and compliance
teams must adapt and respond quickly. As a result, eGRC solutions in the
healthcare vertical are continuously upgraded, contributing to the increased
CAGR in this sector.
North America is anticipated to have the largest market size
during the forecast period in the eGRC market. The region is highly advanced in
cybersecurity technology adoption worldwide and has a constant need to secure
communication infrastructure and sensitive data. Government intervention has
increased due to the growing need to comply with various regulations to avoid
penalties or fines, leading to the use of eGRC solutions. North America is home
to major vendors like IBM, Microsoft, Oracle, SAS Institute, ServiceNow, FIS,
and MetricStream, and it has implemented advanced technology such as AI and ML
in eGRC solutions. Factors contributing to the growth of the eGRC market in the
North American region include changing working scenarios due to COVID-19, BYOD
trends, adoption of cloud and IoT, adherence to compliance and regulations, and
increasing risks like BEC, phishing, malware, and other advanced threats.
During the forecast period, the software segment is
predicted to hold the largest market share. The growth of this segment is
attributed to the large number of players in the EGRC market who offer software
solutions. Additionally, many companies in the EGRC market have a global
presence, leading to wider adoption of software during the forecast period. For
example, as of 2021, Oracle has user communities in 97 countries and 5 million
registered members of Oracle customer and developer communities. The extensive
reach of major companies in the market has contributed to high market growth
during the forecast period.
In 2022 and 2030, the BFSI vertical is projected to hold the
largest share in the enterprise governance, risk & compliance market. The
financial sector has experienced a rise in digitalization and adoption of other
technologies in recent years, which is also benefiting the enterprise
governance, risk & compliance market. This growth is evident in the BFSI
segment. For instance, in November 2022, The Bank of East Asia, Limited
selected Wolters Kluwer N.V., a Dutch software solution provider, to offer its
regulatory reporting software (OneSumX). Such adoption is taking place in high
numbers, resulting in the increased growth of the BFSI segment during the
forecast period.
During the forecast period of 2023-2030, Asia Pacific is
expected to have the highest growth rate. The growth of the Asia Pacific region
can be attributed to the technological advancements that have taken place in
countries such as China and Japan. Major countries in the Asia Pacific region
are among the leaders in the latest technologies, such as 5G and automation.
This trend of keeping up with the latest technology is expected to result in
increased adoption of GRC in the Asia Pacific region in the coming years.
Additionally, India, a growing economy, is witnessing increased EGRC
digitalization and data protection regulation, compliance that businesses must
follow. These aspects have driven the growth of GRC adoption in India,
eventually resulting in the development of the Asia Pacific region.
The key players in the global Enterprise Governance, Risk
Management and Compliance (EGRC) Market
- IBM
- MICROSOFT
- ORACLE
- SAP
- SAS INSTITUTE
- SERVICENOW
- THOMSON REUTERS
- WOLTERS KLUWER
- FIS
- SOFTWARE AG
- METRICSTREAM
- MPHASIS
- SAI GLOBAL
- LEXISNEXIS
- DILIGENT CORPORATION
- ONETRUST
- NAVEX GLOBAL
- RSA SECURITY
- MEGA INTERNATIONAL
- IDEAGEN
- LOGICMANAGER
- RISKONNECT
- ALLGRESS INC
- CAMMS GROUP
- LOGIC GATE
- RECIPROCITY
- SURECLOUD
- PROCESSGENE
- LEXCOMPLY
- STANDARDFUSION
- COMENSURE
- DYNAMIC-GRC
- VCOMPLY
Recent Developments in Enterprise Governance, Risk
Management and Compliance (EGRC) Market
The enterprise governance, risk management, and compliance
(eGRC) market have witnessed recent developments from key players. Oracle
released version 8.6.0 of its Oracle Governance Risk Compliance Intelligence
(GRCI) in April 2022. This intelligence reporting application extracts data
from Oracle Governance, Risk, and Compliance Controls (GRCC). In March 2022,
IBM launched IBM OpenPages with Watson 8.3, which is an integrated GRC platform
that provides a task-focused user interface to help organizations maintain risk
and compliance initiatives. Additionally, in January 2022, SAP introduced
Access Violation Management. It enables real-time risk analysis and provisioning,
user access reviews, role management, and emergency access management for
on-premises and cloud-based enterprise applications. These recent developments
from industry leaders demonstrate their focus on enhancing eGRC solutions and
keeping up with the ever-changing needs of businesses.
The Enterprise Governance, Risk Management and Compliance
(EGRC) market has witnessed several recent developments, primarily driven by
the growing need for organizations to adhere to stringent regulatory
requirements and increasing cyber threats.
One significant development in the EGRC market is the
integration of advanced technologies like artificial intelligence (AI) and
machine learning (ML) in EGRC solutions. These technologies enable
organizations to automate several processes involved in adhering to compliance
requirements, reducing the risk of errors and freeing up resources to focus on
other tasks.
Another development is the increasing adoption of
cloud-based EGRC solutions, which offer several benefits such as easy accessibility,
scalability, and cost-effectiveness. Cloud-based solutions also enable
organizations to implement robust disaster recovery and business continuity
plans, ensuring that they can quickly recover from any security incidents.
Furthermore, there has been an increased focus on developing
specialized EGRC solutions for specific industries like healthcare, finance,
and energy. These solutions are designed to cater to the unique compliance
requirements and risk factors that are specific to each industry.
The COVID-19 pandemic has also had a significant impact on
the EGRC market, with organizations facing new and evolving cybersecurity
threats as a result of the shift to remote work and the increased use of
digital technologies. As a result, there has been a growing demand for EGRC
solutions that can help organizations manage these new risks and comply with
regulatory requirements.
Overall, the recent developments in the EGRC market reflect
the increasing importance of effective governance, risk management, and
compliance in today's complex business environment. As organizations face more
stringent regulatory requirements and growing cyber threats, the adoption of
advanced EGRC solutions is expected to continue to grow in the coming years.