This survey clearly underlines why companies today are struggling to understand and manage the economic impact of the current euro crisis and heightened FX volatility on their businesses
New York, NY (Vocus) May 26, 2010
SunGard together with FiREapps, a member of SunGard’s AvantGard EcoSystem, today announced the results of its foreign exchange exposure management study in the paper, Foreign Exchange Exposure Management: a benchmark survey of foreign currency exposure and risk practices, challenges, and results. A majority of survey respondents (59%) reported that their company had experienced unexpected, material FX gains or losses in the past twelve months. The study uncovered that difficulty in quantifying exposure data, gaining timely access to data, and achieving data confidence are exacerbating the challenge of forecasting and managing FX risk, driving companies to adopt automated FX management and risk solutions.
A worldwide poll of 275 finance executives across a diverse set of industries, such as manufacturing, consumer goods, healthcare and energy, revealed that many companies use manual accounting processes to calculate and monitor their foreign exchange exposure, thereby increasing their risk for error. As a result, these companies lack confidence in the data they use to make risk mitigation decisions, increasing their susceptibility to unexpected FX losses or gains.
Wide swings in currency and market conditions are currently compounding these issues. "This survey clearly underlines why companies today are struggling to understand and manage the economic impact of the current euro crisis and heightened FX volatility on their businesses," said Wolfgang Koester, chief executive officer of FiREapps. "Manual systems and processes that could once adequately provide transparency to FX exposures have broken down in the wake of a constant onslaught of global financial upheaval; today's global market requires automated FX exposure management and complete risk transparency."
“Increased emphasis on data integrity and analytics is driving companies to explore new solutions in FX exposure management,” said Elizabeth St-Onge, managing director of Treasury Strategies, a management consulting firm specializing in treasury, payments and liquidity. “These solutions are helping corporate treasuries access reliable, timely data for a better understanding of their current FX positions and an improved ability to develop hedging strategies.”
Paul Bramwell, senior vice president of treasury solutions for SunGard’s AvantGard business unit, said, “In order for corporate treasuries to overcome the challenges identified in this survey, they must gain more reliable data and increase process automation. FX management solutions, such as those offered by SunGard’s AvantGard together with FiREapps, can help treasurers achieve this goal by aggregating and modeling data from various sources to identify exposures across the balance sheet, helping them make better hedging decisions and decrease their FX risk.”
About SunGard’s AvantGard
SunGard’s AvantGard is a leading liquidity management solution for corporations, insurance companies and the public sector. AvantGard provides chief financial officers and treasurers with real-time visibility into cash flows and increased operational controls around receivables, treasury and payments. AvantGard helps companies drive free cash flow and reduce inefficiencies across the EcoSystem of suppliers, buyers, banks and other trading partners. For more information, visit http://www.sungard.com/avantgard.
SunGard is one of the world's leading software and technology services companies. SunGard has more than 20,000 employees and serves 25,000 customers in 70 countries. SunGard provides software and processing solutions for financial services, higher education and the public sector. SunGard also provides disaster recovery services, managed IT services, information availability consulting services and business continuity management software. With annual revenue exceeding $5 billion, SunGard is ranked 380 on the Fortune 500 and is the largest privately held business software and IT services company.
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