Big Four firms leverage growth in risk services market
The Big Four accounting giants are among the consulting firms enjoying growth in the global risk services market, which is set to surpass $80 billion by 2020, according to a new report.
The report, from Source Global Research, found the global risk services market grew 7 percent to $62 billion in 2017 and predicts it will increase to more than 10 percent by 2019, blowing past the $80 billion mark by 2020. The estimated growth is over 50 percent, or nearly $30 billion, in just five years.
Cybersecurity represents the biggest risk management service, estimated at $15 billion, and it’s also one of the fastest growing, at 11 percent.
“There is huge potential in the risk services market beyond the revenues achieved already, and the outlook is very positive for firms that can convince clients that their services complement — or are better than — clients’ internal capabilities,” said Callum Jack, a senior analyst at Source Global Research, in a statement. “Technology expertise will be central to winning work in risk services in the future with cyber risk continuing to grow and evolve in parallel with digitization. For this reason, digital know-how will play an increasingly important role in the delivery of both low-cost and high-value services.”
The U.S. dominates the global risk services market, at $32 billion, thanks to the size of its economy and the position of professional services firms like the Big Four, which have invested heavily in hiring technology experts.
“Cyber is front of mind and on the front of the newspapers, and that’s only going to increase,” stated Deloitte risk advisory clients and industries leader Ed Marsden. “As companies migrate large portions of their legacy IT estate to the cloud; develop increasingly complex ecosystems; and innovate with AI, blockchain and robotics, there’s a need for even greater vigilance.”
Nearly all sectors of the economy are seeing greater demand for risk management services. The financial services sector is by far the biggest market, thanks to the regulatory environment, particularly since the financial crisis, along with the attractiveness of the sector to cybercriminals. Other heavily regulated industries, such as pharmaceuticals and health care, are outpacing financial services in terms of growth, though both remain smaller markets for risk management. However, there are signs of increasing demand from those sectors.
“The health industry shows the greatest promise in terms of shifting its thinking to see risk management as including a view on opportunity, and this will help to build a more resilient health industry,” said PwC global risk and regulatory consulting leader Dennis Chesley.
For a copy of the report, visit www.sourceglobalresearch.com.