The compliance management software market is forecast to grow at a CAGR of 9.5%, reaching USD 5.5 billion in 2031 from USD 3.5 billion in 2026.
Compliance Management Software is a solution that aims to evaluate and control all business components so that these elements conform to relevant laws, the internal standards of the organization, and the requirements of its customers and partners. This software covers all risk management and compliance aspects within a central integrated ARIS repository to ensure optimum transparency, effectiveness, ease of operation, and control. Using existing assets, Software AG’s compliance management software helps in lowering the total ownership cost. This advanced software also makes it easy to establish risks and controls and risk tolerance levels that are commensurate with the organization's mission, goals, and policies, as well as ensure adherence to external regulators.
Due to this compliance management tool, users can create one unique requirement catalog concerning the company’s needs and easily adjust it in proportion to new legislative changes, thus eliminating unnecessary work and regulation collision. Addressing the particular complaint promptly and the 'no wrong door' motto is reducing potential business failure risks and identifying, evaluating, and controlling business risks that enhance business agility through the compliance management solution.
Integration of advanced technologies is anticipated to boost market growth
As various industries are embracing IoT and cloud computing, the amount of data created at each endpoint has grown tremendously, creating the necessity of analyzing data silos for risk factors and timely provision to relevant parties. For this reason, many vendors have begun to provide solutions for organizations that would help them address different aspects of regulation and compliance backed by AI. With such AI-powered solutions and platforms that incorporate analytical tools, nearly all data, big or small, can be turned into meaningful insights by businesses to inform their decisions. OneTrust provides solutions such as OneTrust Data Discovery, which helps companies in identifying and organizing both the structured and unstructured data available to them.
High demand for real-time monitoring
The need for prompt identification and resolution of compliance issues is reflected in the high demand for real-time tracking and reporting capabilities. Conventional reporting and manual tracking methods are frequently inadequate for quickly identifying and resolving compliance deviations. Agencies can monitor key performance indicators (KPIs), regulatory activities, and important compliance metrics by integrating real-time monitoring tools with compliance automation tools. This proactive approach helps stakeholders identify anomalies, deviations, and capability compliance risks early on, enabling prompt corrective action and averting compliance violations.
Moreover, real-time monitoring and reporting are critical to improving overall performance and operational efficiency. By providing current information on compliance reputation, characteristics, and styles, these capabilities help businesses allocate resources more efficiently, expedite compliance processes, and enhance procedure effectiveness.
Increased adoption of proactive compliance management tools
In the backdrop of evolving legislation and more severe enforcement and oversight mechanisms being put in place, organizations are intensively changing their strategy of complying with regulations from the traditional responsive strategies to a more proactive one. The latter tendency is observed in the market for compliance automation solutions, where strong appreciative demand for proactive compliance management is increasing. The typical reactive method of dealing with compliance involves watching for problems and fixing them after they occur, often employing audits or investigations or administering penalties. The limitation of this stance is the inability to anticipate and act upon a given compliance-demanding situation satisfactorily.
Conversely, proactive compliance management means taking steps concerning compliance risks so that such risks do not develop into violations or breaches. This approach is consistent with the ideas of risk control, continuous improvement of processes, and regulating activity based on forecasts rather than past occurrences.
Increasing cyber threats are boosting the market share
The need for the right talent to lower cyber risks has increased dramatically due to the growing risk of cyber threats. Furthermore, companies are finding it difficult to counteract the prevalent cyber threats, which has increased the demand for compliance management systems. The growing demand for IT security, privacy, and compliance management solutions results from the organizations' significant need for efficient compliance talent for cyber threats and efficient planning for cyber incidents.
High costs and lack of standardization are anticipated to impede market growth
Most businesses cannot afford compliance software solutions, which are typically highly expensive. The significant expenditures that these solutions require are met with resistance by many organizations, particularly in light of the present economic situation.
Moreover, one of the biggest issues facing the compliance software market is the lack of standardization. This makes it difficult to compare products and obscures the various offered features. For this reason, choosing the appropriate compliance software solution becomes a big challenge for most companies.
North America is witnessing exponential growth during the forecast period
Different sectors, such as cybersecurity, health, finance, privacy, environment, and others, are drawn out in the legal regime in place within North America. Many organizations have to adhere to several rules, such as the Sarbanes-Oxley Act (SOX), Health Insurance Portability and Accountability Act (HIPAA), and General Data Protection Regulation (GDPR), among others, which are tailored for specific fields. Given that the depth of regulations increases sharply, many organizations have also turned to mechanization to provide accurate, consistent, and effective ways to execute compliance duties.
In June 2024, Thomson Reuters and SAP extended their collaboration to help clients automate US tax reporting. Businesses can now automate and file sales and use tax returns in the US directly from SAP Document and Reporting Compliance due to the integration of ONESOURCE Sales & Utilize SAP Document and Reporting Compliance for SAP S/4HANA and Tax Compliance together. This improves efficiency, accuracy, and risk mitigation.
In January 2024, Avalara, Inc., a well-known supplier of cloud-based tax compliance automation for companies of all sizes, and Actabl, a leading provider of hospitality software, announced a partnership. Through the consolidation of revenue and tax data from various business systems and the automation of tax compliance processes, this partnership seeks to transform hotel tax compliance.
| Report Metric | Details |
|---|---|
| Study Period | 2021 to 2031 |
| Historical Data | 2021 to 2024 |
| Base Year | 2025 |
| Forecast Period | 2026 – 2031 |
| Companies |
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By Application
Risk Assessment and Management
Audit and Reporting
Policy Management
Incident Response
Others
By Deployment
Cloud-based
On-Premise
By Enterprise Size
Small
Medium
Large
By End-User Industry
By Geography
North America
United States
Canada
Mexico
South America
Brazil
Argentina
Others
Europe
United Kingdom
Germany
France
Italy
Others
Middle East and Africa
Saudi Arabia
Israel
Others
Asia Pacific
Japan
China
India
South Korea
Indonesia
Thailand
Others