RiskStudy Finds Gaps in Financial Risk Management Methods Among Corporations

Study Finds Gaps in Financial Risk Management Methods Among Corporations

A recent SunGard study, ‘Financial Risk Management in Treasury’, has revealed that corporate treasurers around the world find it difficult to consistently and accurately measure and monitor financial risk exposure. The study of more than 200 treasury professionals from more than 25 countries examined practices around interest rate, credit, counterparty, commodity, liquidity, foreign exchange (FX) and market risk.

Accurately measuring and effectively managing exposure to financial risk is of utmost importance to a corporate treasurer. Failure to do so can lead to consequences from embarrassing headlines to large financial losses. In spite of this, many companies continue to use spreadsheets to perform essential analysis such as short-term cash forecasting (65%) and monitoring of counterparty trading limits (45%). Using spreadsheets to perform complex risk management tasks can expose a process to fraud, the potential for non-compliance with basic accounting principles, and in some cases, human errors that have cost companies millions of dollars.

Paul Bramwell, senior vice president (SVP) of treasury solutions at SunGard’s AvantGard business unit, said: “This study shows that although 87% of firms have a risk framework established within their organisations, many are reliant on manual processes which can leave a firm vulnerable to errors. The use of treasury technology can automate and enhance oversight while helping to improve efficiency and reduce potential for errors.”

Related Articles

Report highlights importance of climate science in risk awareness

Risk Report highlights importance of climate science in risk awareness

5d The Global Treasurer
Businesses boost investment in technology to confront risk

Risk Businesses boost investment in technology to confront risk

1w The Global Treasurer
Buoyant growth in Africa points to healthy risk-reward trade-off

Risk Buoyant growth in Africa points to healthy risk-reward trade-off

4w The Global Treasurer
Businesses express concern as protectionism presents risks to global trade

Risk Businesses express concern as protectionism presents risks to global trade

1m The Global Treasurer
De-risking: repairing a broken model

Risk De-risking: repairing a broken model

2m Abbas Ali
Tariffs, trade wars and the impact on the global supply chain

Risk Tariffs, trade wars and the impact on the global supply chain

2m Lucy Harding
Brexit and sterling: hedging strategies for uncertain times

Brexit Brexit and sterling: hedging strategies for uncertain times

2m Jonathan Pryor
Combating the growing menace of trade-based money laundering

Financial Crime Combating the growing menace of trade-based money laundering

3m Mohammad Zraiqat