In globally integrated markets, foreign exchange movements consistently impact companies’ financial performance. CFOs and treasurers must have good visibility into how these currency movements are impacting their businesses and also be able to explain these results to investors. To do this effectively, the organization must display a clear understanding and transparency into its exposure profile, as well as the risk management strategies which accompany it. Modernizing your organization’s exposure management process can be challenging, but it can help make your company more efficient and create a competitive advantage.
Whether it’s organic growth, M&A activity, adapting to technological change or an over-reliance on spreadsheets, many companies are concerned that the exposure management process needs updating. Exposure management is never a “one-size-fits-all”. The solution each company requires will likely depend crucially on the nature of the business, the intricacies of its operating model, the “easy-wins” for value-adding opportunities and the priorities of senior leadership and the board. It also depends on how integrated other parts of the end-to-end treasury process are, such as trade execution, reporting and settlement.
Well-designed exposure management processes lay the foundation for effective treasury risk management. Risk managers are able to make more informed and timely decisions and efficiently identify the potential source of any last minute surprises. It is designed to increase data quality and reduce manual effort so that treasury can become more involved in the value-added elements of the job. If executed effectively, treasury can fundamentally reshape the exposure management process, unlock significantly stronger analytics and provide the CFO and treasurer with more reliable and timely insights.
CM Risk & Regulatory Leader, PwC US
Principal Financial & Treasury Management, PwC US
Partner Financial & Treasury Management, PwC US
Managing Director, Corporate Treasury Solutions , PwC US
Partner, Capital Markets and Accounting Advisory Services, PwC US