Andrew Bateman, head of corporate liquidity solutions at FIS, cited a “continual increase” in the share of companies with formal risk policies amid the greater corporate focus on financial risks since the 2008 financial crisis.

And according to the survey, while 26% of companies judged their risk management efforts to be “very effective,” in line with the previous survey, 31% rated themselves as “somewhat effective,” up from 20% in the previous survey.

FIS found a correlation between finance teams' view of their risk management effectiveness and the level of technology they have deployed.

About half of the companies surveyed use spreadsheets or other manual methods to handle risk management, and according to the report, all of the companies that gave themselves a poor grade on risk management use those manual methods.

At the other end of the spectrum, although 26% of all the surveyed companies rated themselves as “very effective” at managing risk, that rose to 43% among the companies that use a treasury management system with risk management capabilities, and to 71% among those that use a specialized risk management information system that is integrated with their treasury management system.

“The effectiveness of risk management in a treasury is driven by the technology that's allowing them to do that management,” Bateman said. “Those that move from spreadsheets to treasury systems are going to have the greatest capability to have a formal risk management policy; those that have specialized risk systems, even more so.”

The survey results suggest that companies are gradually moving away from handling cash management and risk management on spreadsheets.

Bateman said that while Excel spreadsheets offer an attractive combination of flexibility and low cost, the availability of software-as-a-service (SaaS) technology is convincing companies to adopt specialized software.

With SaaS, “the cost is significantly lower, so it makes it an easier decision for someone to make,” he said. “The availability of SaaS, that's the thing that's helped people move off spreadsheets.”

Risk Management Concerns

Nevertheless, treasury and finance executives continue to see challenges in a few areas. In the FIS study, 65% said they have moderate or severe difficulty in managing market risks, such as interest rate risk and foreign exchange risk. The report linked those concerns to market volatility as well as the negative interest rates seen in Europe.

The companies also cited challenges related to credit risks, with 56% citing moderate or severe difficulty in dealing with risks related to the companies with which they do business and 54% citing moderate or severe difficulty in dealing with bank counterparty risks. And almost half (49%) of the companies cited moderate or severe difficulty dealing with liquidity risks; the report notes that money market fund reforms in the U.S. and negative interest rates overseas have made it harder for treasurers to find appropriate short-term investments.

One risk the surveyed finance and treasury executives seemed relatively relaxed about was cyberattacks. Just 7% said that cybersecurity risks are having a significant effect on their risk management strategies currently, while 29% said such risks are having some effect.

Bateman, pictured at right, said he was surprised by the low readings on cyber risks given events like the $81 million cyberheist from Bangladesh's central bank, which occurred in February, but he predicted that sentiment on cybersecurity would shift in the next year or so.

“Treasurers have to work very closely with their IT counterparts on security,” he said, “to put in place the right infrastructure and to have policies around the use of technology that have a high level of discipline.” Treasurers also need to educate their employees about the ways cyber criminals will try to get information or drive a payment, he said.

“If a payment is made out of a system because of a fraudulent activity, whether because of collusion between employees or a breach of cybersecurity, the treasurer needs to realize they're on the hook for that and needs to work with their IT department to mitigate it,” Bateman said.

The report also noted the regulatory risk that treasurers face. “The interesting thing for me was just the level of uncertainty about some of the key regulations that are coming out,” Bateman said, citing the new international accounting standard for hedge accounting, IFRS 9. According to the survey, almost half of those surveyed are uncertain about the effect the new standard would have on the way they account for derivatives.

“We're only a year away now from the mandatory adoption of that, and we still have a lot of corporates out there that really haven't thought about the implications and how it's going to shift from the previous standard,” Bateman said, adding that he expects to see “a lot of activity over the next 12 months” as corporates prepare for the January 2018 implementation.