FX risk is still a top priority for corporate treasuries, according to a recent survey from treasury management system provider Kyriba. Nearly 60 percent of those who responded to the survey cited FX as one of their three biggest risk factors. The others were poor visibility into liquidity and forecasts, as well as general macroeconomic issues. While companies are concerned with fraud, it’s not a top priority for treasurers.
“Given all of the current global geopolitical uncertainty and the ongoing volatility with the euro, it should come as no surprise that FX tops the list of risk factors impacting the treasury team in 2015,” Kyriba said. Add to this the impact on earnings. So far this year, Facebook, General Motors, McDonald’s, Procter & Gamble, PepsiCo and Walmart among many others, have reported earnings hit due to dollar strength.
Another common survey theme was the “lack of visibility into liquidity and forecasts,” Kyriba said. This comes despite it being “one of the most time-consuming activities performed by the treasury team.” Forecasting is still seen as a key risk factor for 40 percent or treasuries, Kyriba said. One reason it’s seen as a very risky area is because of the use of spreadsheets for cash forecasting and it’s risk factor that technology “could certainly help alleviate” by minimizing errors. According to Kyriba, for those respondents that use spreadsheets as their primary treasury tool, 47 percent say this is one of their three largest concerns. This compares to just 15 percent for those respondents who use a treasury management system.
The Kyriba survey, which polled more than 300 treasury and finance professionals, also revealed that 53 percent of organizations have seen fraud attempt – either external or internal – and more than half of these companies suffered losses as a result. But despite this risk, only 11 percent of treasury pros view fraud as one of their three most pressing issues for the coming year.