A report by Fidelity Information Services (FIS) has found that 44 per cent of treasury and finance professionals are concerned that their risk management performance is mediocre or poor. The findings of FIS's 2016 Treasury Risk and Regulations Market Study, show that treasury's focus in recent years has been on planning liquidity and risk management strategies that respond to the changing regulatory environment, while limiting volatility and establishing visibility of exposures.

The key findings of the research are:

• 81 per cent of respondents have a formal risk policy, representing an increase of 15 per cent since 2015.
• the main risk management challenges for treasurers are: credit risk to commercial and bank counterparties (56 and 54 per cent respectively); market risk (65 per cent); and liquidity risk (49 per cent).
• 26 per cent said their risk management approach is 'very effective'. However, this is higher – 43 per cent – for those using a TMS with risk management capabilities, 69 per cent for those using a specialised risk management system that is not integrated with their TMS, and 71 per cent for those using a specialised risk management system that is integrated with their TMS.
• 44 per cent of treasurers are concerned that their risk management performance is mediocre or poor. This particularly applies to those that use spreadsheets and ERP systems for risk management.
• 92 per cent of treasurers use external credit ratings to categorize their banks from a risk standpoint, but many are supplementing this with a more dynamic, proactive approach to monitoring credit quality;
• 68 per cent consider country/region risk, while 58 per cent include industry in their risk evaluation, reflecting the market impact of wider economic and geopolitical risks, and vulnerabilities that affect all players within an industry. Capital structure has also become more important (62 per cent) as treasurers recognise the importance of a bank’s liquidity, security, and funding.
• treasurers are being forced to enhance their monitoring and modelling tools to anticipate the short and longer term impact of major political and economic changes such as Brexit and the US presidential election.
• only 17 per cent of survey participants anticipate that addressing cyber threats will be a significant priority for the year ahead, while a further 35 per cent expect that cybersecurity will have a moderate impact on their risk management strategies.