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The Future of FX Risk Management

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A world-class currency analytics platform significantly enhances TMS risk management capabilities, allowing corporates to leverage both technologies to reduce currency risk and costs, and better manage the impact of FX exposures on financial results.

Managing foreign exchange risk is an ongoing challenge for multinational companies as their organizations grow and treasury processes and regulations become increasingly complex. Named a top risk by 53 percent of treasury teams, FX risk can have large negative impacts to a company’s bottom line. In order to better address currency risk, corporates are looking to extend the reach of their treasury management systems (TMS). Although TMS provide a wide array of services, most pre-trade risk management offerings for FX are limited. To curb bottom line impacts, the additional implementation of a currency analytics solution can greatly enhance FX risk management processes through both internal exposure reduction and external hedging.

HOW A CURRENCY ANALYTICS SOLUTION COMPLEMENTS YOUR TMS

FiREapps, a leading Saas-based currency analytics company with solutions for balance sheet, cash flow and income statement, complements TMS functionality to ensure treasury has confidence in their data and processes to better mitigate currency risk.

Access to Accurate, Complete and TimelyData to Establish Confidence In Results

FiREapps is an essential pre-trade component of a comprehensive FX risk management program designed to operate in conjunction with TMS. On-demand transaction currency balance collection from your ERPs, spreadsheets and other systems, and data integrity analysis and data cleansing, ensure your exposure data is accurate, complete and available to view in a single consolidated corporate view. The industry leader in currency exposure data aggregation, FiREapps has SAP and Oracle certified extract toolkits and can interact with most ERPs to facilitate exposure analysis on a daily, weekly or monthly basis.

Enhanced FX Exposure Analytics to Determine the Most Cost Effective Way to Manage Risk

To better understand and report the underlying drivers of currency risk, FiREapps offers a full suite of analytical tools, including exposure analysis by currency pair with exposure netting at a company, entity, account and account group level and user defined reporting. With in-depth intercompany analytics, rate change impact and constant currency analyses, corporates can easily view how financial results are impacted by foreign exchange to help reduce exposure to currencies and manage earnings per share at risk. Data integrity analysis with exposure definition logic assures the currency data and subsequent trade recommendations provided to a TMS for trade reporting accurately reflect true corporate exposure and risk.

In-Depth FX Reporting to Benchmark the Success of Your FX Risk Management Program

FiREapps takes FX reporting one step further by providing detailed transaction currency reports for user defined periods, as well as extensive exposure trend reporting, value at risk (VaR) analysis and scenario testing. Agile reporting allows treasury to look at corporate exposure at a consolidated level, by entity or any other organizational dimension required. With built-in flexibility, FiREapps easily accommodates management reporting requirements and changes in company-specific reporting structures, which can be designed to align with the reporting in your TMS.

Increased Transparency into Your Data and Processes to Improve Compliance with internal Controls

Utilizing FiREapps as a component of a TMS anchored FX management program enables increased visibility into accounting data and transparency into corporate processes. FiREapps displays detailed underlying data to show how the exposure number was formulated, making it easy to tie the exposure back to the original ERP accounting data. This level of transparency provides insight into where exposures can be eliminated organically and allows treasury to understand the main contributors to its company’s corporate exposure.

An integral technology for managing FX risk

When used in conjunction with a TMS, FiREapps enables an end-to-end workflow with accurate, complete and timely data collection, comprehensive analytics and reporting, and full audit and compliance trails. The value of a TMS for risk management and hedge accounting is undeniable, but leveraging FiREapps as a supplemental FX risk management tool enables multinationals to proactively address currency exposure and manage EPS at risk.

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For more information on how FiREapps can interact with and enhance your TMS’ FX risk capabilities, including full workflow automation, visit www.FiREapps.com/TMS.

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