BUSINESS ASSURANCE MARKET ANALYSIS

The global Business Assurance Market size was valued at US$ 158.5 Billion in 2022 and is anticipated to witness a compound annual growth rate (CAGR) of 8.2% from 2023 to 2030. Business assurance enables the organizations to address various challenges that include overall risk management, audit management, compliance maintenance and effective governance of an organization. This allows the businesses to maintain effective control over various functional departments within an organization.

The global business assurance market is expected to witness significant growth during the forecast period (2023–2030). The market is characterized by the increasing demand for effective solutions to manage and control the challenges that occur in various operations within the organization detection. As the use of business assurance software and tools helps in managing various aspects of businesses like risk, compliance, audit, etc. the demand for these services would grow substantially in the near future.

Global Business Assurance Market: Regional Insights

North America is the current big market for the business assurance sector in the world. Due to the presence of huge corporation who have their operation spread out across the world and a strong industrial set-up the region has a huge demand for the business assurance market. However, as most of the companies in America are inclined towards outsourcing their work from the foreign subsidiaries or third party organizations due to the lower cost in developing countries like India; the region is slowly losing its relevance when it comes to business assurance market. Hence, the overall market share of North America as a region would decrease gradually with respect to the business assurance market.  

The Asia Pacific region is expected to be the driver of growth for the business assurance market across the world. The region is witnessing a rapid and extensive industrial growth. Due to the lower labor cost and policies that promote industrial expansion; the region is blessed with the presence of business corporations from across the world. Especially the countries like China, India and Taiwan have a huge potential for growth as they have a strong domestic industrial set-up and they operate as the hubs for global corporations too. These industries like IT services, manufacturing and processing are dominant in the region which would lead to the increase in the demand for business assurance services like auditing, risk assessment, compliance, etc. All these factors point towards the fact that the Asia Pacific region would lead the growth charts for the global business assurance market during the forecast period.

Latin America is another region that shows the potential for growth in the business assurance market. The economies in the region are dominant in the primary sector like agriculture and mining. All the allied activities in these sectors require business assurance services. The mining sector is heavily dependent on the comprehensive risk assessment, norms related to environment as well as regulatory compliance, effective governance and stakeholder management. All these domains are covered by the business assurance market. Hence, such dominance of the primary sector in Latin America is expected to boost the growth of the market exponentially during the forecasted period.

Global Business Assurance Market- Impact of Coronavirus (Covid-19) Pandemic:

The covid-19 pandemic witnessed the business world going into a significant slowdown due to the lockdowns imposed by various countries ranging for different tenure. This disrupted the demand for global business assurance market negatively. Especially the business assurance services offered to manufacturing industries saw an immense decline. This made it crucial for the market players to shift their focus on the services rendered to the service sector as the global IT corporations and consulting firms capable of implementing remote working model were still operating during the pandemic period. Hence, the business assurance services market was able to stay operative in this sector in association with services sector. This period saw a huge development in services offered by the business assurance market to these industries with increasing focus on online training modules, cloud computing, virtual workplace management services, etc. Hence, the pandemic period could be said to mobilize the developments in the services sector of the business assurance market.

Figure 1: Global Business Assurance Market Share (%), By Region, 2022

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Global Business Assurance Market Drivers:

Growing Adoption of Business Assurance to Increase Confidence and Improve Efficiency of Business Processes:

The businesses across the world are operating in highly dynamic and competitive market. The competitive and regulatory forces are making it increasingly important for the companies to have a strong and comprehensive business assurance policy which covers various domains such as; compliance, risk assessment, governance, etc. The regulatory forces across the world are getting increasingly stringent in the current scenarios where organizations have to comply with several statutory, environmental and financial norms. The failure to comply with these norms would lead to strict actions against the company. To avoid such situations having an effective governance and compliance management system is crucial for the organizations. Additionally, to maintain good stakeholder relations, the organizations need to justify the strategic decisions they take. For instance, according to an article published by Hasmukh Shah and Co., in May 2022, the importance of auditing services in improving the efficiency of companies is emphasized due to the factors like building regulatory, compliance and governance systems. Hence, assessment of risk which includes identification, measurement and management of risks becomes necessary.

Expansion of the Industrial Sector:

The Industrial sector is still growing with rapid strides in the developing economies across the world like India, China, Vietnam, Brazil, etc. This expansion is in the primary, secondary as well as tertiary sectors. The industries in the sectors like mining, manufacturing, outsourcing of IT services, etc. are continuously growing in number. The growth in the number of these industries would naturally increase the demand for business assurance market. For instance, according to a report by ASEAN Briefing published in January 2023, the region of South-east Asia is expected to witness an impressive growth in terms of the number of industries due to the factors like improving economic condition, low cost of labor, supportive government policies, etc. For instance, according to an article published by Euromonitor International, in September 2022, the growth prospects of the global industrial sector show a strong trend in the recent future. According to their survey, around 42% of the industries aim to expand their operations, supplier and resource pool to give greater production flexibility in the future. This is an extremely positive sign for the business assurance market as the expansion of the industrial sector would automatically increase the demand for assurance services in the region leading to further growth of the market.

Global Business Assurance Market Opportunities:

Significant growth of the IT services sector:

It is a well-known fact that the current business world is dominated by the Information and Communication Technology sector. The importance of the IT sector can be attributed to the fact that most of the activities in the personal as well as commercial domains are becoming digital. The role of IT industry in digitalization of the business as well as day-to-day processes for the individuals is immense. This has led to an exponential growth of the IT sector. For instance, according to the report published by Skyquest, in April 2023, the global software market was valued at around US $51,800 Mn and is expected to grow upto the valuation of US $1,17,640 Mn. Growing at a CAGR of 8.7%. This growth would be fueled by the evolution of fields like IoT and Artificial Intelligence. The emergence of huge corporations like Google, Amazon, Microsoft, etc. points towards the fact that the potential for growth is huge in the sector. As the IT sector grows, their need for having several business assurance services and systems increase to that extent. As these organizations have been imposed with several compliance norms, industry regulations, internal efficiency systems, effective governance model, etc. All these services are provided by the business assurance market. Hence, the continuous rise of the IT sector across the globe is bound to provide more opportunities to exploit for the business assurance market.

Growing regulations from the governments across the world regarding effective governance of the organizations:

The governments across the world are increasingly focused on maintaining a policy of having strict corporate governance framework in place for the effective management of the organizations and safeguarding the interests of all the involved stakeholders. The corporate governance framework requires the implementation of sound auditing systems, and reporting of vital data within the organization. All these services come under the umbrella of business assurance services. This ensures the availability of strong market for the assurance sector. By developing systems that cater to these requirements of the organizations, companies can take advantage of this growing market. For instance, in October 2021, SEBI made it mandatory for the top 1000 companies by market capitalization to report the ESG (Environment, Soccial and Governance) framework in an updated format. This step was taken to ensure that the culture of sustainability is further promoted. Hence, as the regulatory norms from the authorities across the world become more stringent, this would create more demand for compliance and governance systems in the corporations which would in-turn act as an opportunity for the business assurance market to grow even further.

Global Business Assurance Market Trends:

Growing implementation of AI in Digital Assurance services:

Digital assurance is that sub-sect of the business assurance market which deals with the assurance services that are provided digitally in the form of systems and software to the companies in the domains of risk management, compliance systems, governance systems, etc. These services include the digital devices and processes in the organization and that are responsible for the operating for the entire digital ecosystem. The recent trends show that the inclusion of AI is increasing in the realm of digital assurance. The development of smart systems capable of machine learning which would enable the systems to get better and more efficient as more and more data is processed through them. This would also help the organizations to automate the processes and increase the speed with which activities are performed. For instance, In February 2022, ProArch, a US based, consultancy, data and cyber security Company acquired Enhops, a software engineering and quality testing company to increase its software and quality assurance capabilities. This acquisition in the digital assurance industry is the testimony to the fact that digital assurance services have a he growth potential and organizations across the globe are increasingly working towards acquiring means to provide those services.

Global Business Assurance Market Restraints:

High Cost Associated With Installation and Maintenance of Business Assurance Systems:

The initial capital and maintenance costs associated with Business Assurance systems are high. The assurance services cater to variety of business functions like quality assurance, risk management, governance, etc. Hence, a comprehensive system of business assurance requires the implementation of services in all of these functions of organizations. This in-turn means that the organizations have to incur a huge set-up and maintenance cost for implementation of these systems. The digital components and data management eco-systems take up significant cost to develop and run efficiently. Hence, the organizations might restrain from implementing such services comprehensively in their operations and rely on traditional measures of complying with the norms. This might affect the growth prospects of the business assurance market during the forecasted period. For instance, according to an article published by CHAS, in April 2022, the risk assessment component in the corporate governance systems under the business assurance services forms the major cost center for the firms. As risk management is one of the crucial segments in global business assurance market, the rising costs in this segment would pose a question in front of the organizations regarding the adoption of this service extensively within the organization.

Growing complexities of processes in various functions of business:

The global business assurance market operates on the premises of providing services to other businesses. These services cater to frameworks of corporate governance systems, compliance management systems, risk assessment systems, process improvement systems, etc. These factors point towards the fact that changes in the level of complexities of these systems or processes within an industry directly affects how the management systems for these functional areas are designed and modified. The changes might occur due to the statutory or regulatory changes or strategic changes adopted by the organization with an objective of optimizing operations. As, these processes evolve and become more complex, the business assurance services which cater to these systems have to adapt to the respective changes and evolve simultaneously. Hence, the growing complexities of organizational processes in this dynamic business world might act as a challenge to the global business assurance market and affect the prospects of its growth during the forecast period. For instance, according to an article published by Appinventiv, in April 2023, the challenge of rising complexities in business process is addressed. The article states that according to IBM’s Global AI Adoption Index 2022, generative AI has made its way into the realm of business complexity management, where around 35% of companies have incorporated it in their system.

Figure 2: Global Business Assurance Market Share (%), By Segment, 2022:

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Global Business Assurance Market Segmentation:

The Global Business Assurance Market Report Is Segmented Into Offering Type, Component, Deployment Type and Vertical

Among the offering type, risk management and compliance management segment is estimated to account for the largest share of the business assurance market. Growing statutory and governance norms of the regulatory authorities across the world to ensure the sound management of corporations to safeguard the interests of the several stakeholders is the prime driving force behind the growth in demand for this segment. Moreover, the corporations are highly concerned about estimating the possible level of risk before taking any major decision in terms of investments or resource allocation. This will further fuel the growth of risk assessment segment.

The component type is further segmented into software and services. The rise of the services sector in the countries across the world is significant. According to a report published by World Trade Organization (WTO), In October 2019, the share of service sector has grown from just 7% in 1970 to over 20% in 2019. Additionally, the services are estimated to account for around one-third of total world trade by 2040. This growth would be predominantly because of the expansion of IT sector which is based on generation of IT solutions and services that cater to the varied requirements of the business world. The countries like India, China, Taiwan, etc. have become hubs for global as well as domestic corporations when it comes to outsourcing of IT related software and services. These factors point towards the fact that software and services segment shows immense potential for growth during the forecast period.

The application of business assurance services based on deployment type covers industries like manufacturing, engineering, construction, power and utilities, transport and logistics, government, etc. is a testimony to its wide coverage. This expansiveness in the scope provides the advantage of being relevant for most of the industries operating in various sectors of the economy which in-turn assures a strong and growing demand for the business assurance market.

Global Business assurance Market: Key Developments

• In May 2023 Electronics Ciena Corporation, a global corporation which specializes in providing business assurance services for the companies operating in telecommunications market announced that it will showcase their latest enhancements in the GeoMesh extreme submarine network at EMEA 2023 organized in Business Design Centre, London.
• In February 2023, LexisNexis Risk Solutions, a US based business assurance company specialized in the segment of risk assessment services launched its data center in India. This launch would bring the global capacities of the company to the businesses in India and enable them to identify the potential risks and mitigate them in timely manner while keeping the data locally. This is the company’s first step to expand in the Asia Pacific region.

Global Business Assurance Market: Key Companies Insights

The market players operating in the market are focusing on product launch and merger, acquisition strategies to expand the global presence

Some of the key players in the Global Business Assurance Market are: Atkins Global, Baker Engineering and Risk Consultants, Inc., Ciena Corporation, AssuringBusiness, Cognizant, Stress Engineering Services, Inc., INFOSYS, Cyber Risk Assurance, Equinox Information Systems, HCL Technologies, aeSolutions, Tata Consultancy Services Ltd., LexisNexis, NETSCOUT Systems Inc., Prolifics Inc., and Tenea Technologies.

Global Business Assurance Market- Impact of Coronavirus (Covid-19) Pandemic

The country-wide lockdowns and the economic slowdown brought by the pandemic had affected the demand side of the market drastically. The business assurance market caters to manufacturing, processing as well as services industries. As the manufacturing companies were shut for few months during the lockdown hence the business assurance services showed stagnancy when it comes to the manufacturing industries. The services sector on the other hand showed some different trend. As many companies operating in IT and related services were operational with the help of remote working practices, the demand-side in that sector was not completely stagnant which kept the market moving during the pandemic period.

Definition: Business Assurance services are the services rendered to organizations so that they can adequately address the challenges regarding governance, risk and compliance systems essential in ensuring the efficiency and effectiveness of the businesses.