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Your Currency Management Toolkit For 2023
22-02-2023 | treasuryXL | LinkedIn |
On January 24th, 2023 we hosted a joint webinar with our partner Kantox about the Currency Management Priorities for 2023. In this 45 minute session we take you through the key trends and opportunities in currency management.
Session and Speaker details
Moderated by Pieter de Kiewit, owner of Treasurer Search, this deep-dive into treasury technology and the increasingly strategic role of the treasurer will bring together insights from industry leaders, including Antonio Rami, Co-Founder and Chief Growth Officer at Kantox, Maurice Fisher, owner of MFR Treasury Services and Jesper Nielsen-Terp, Head of Group Treasury at Lunar.
The panel will be covering the following topics:
- Why your current systems are not enough to manage currencies
- How to manage FX risk in times of uncertainty
- The changing role of the treasurer
- Treasury technology for 2023 and beyond. Is it all about APIs and connectivity?
Recap Live session and Conclusion
I moderated a well-attended webinar about currency management in corporate (treasury) environments. Two industry experts, Maurice Fischer and Jesper Nielsen were joined by Kantox founder Antonio Rami. Main take away for me is that the success of any currency management strategy relies on the smooth coordination of activities and decision-making among different departments and stakeholders.
What is a successful currency management strategy?
Think about it, currency management is not just about buying and selling foreign currency, it’s about understanding the complex and ever-changing market dynamics, identifying and mitigating risks, and making informed decisions that align with the overall financial goals of the company. And without effective communication, all of this becomes nearly impossible.
An example
For example, the treasury department is of course operationally responsible for managing the company’s currency exposure, but in order to do this right they need to effectively communicate with the accounting and other departments. FX risk results from actions in procurement in sales, not from what’s happening during bookkeeping. As Antonio Rami mentioned during the webinar, this lack of communication could lead to discrepancies in the company’s financial statements and a lack of understanding of the company’s true financial position. Furthermore, if the treasury department is not communicating effectively with the rest of their organisations, the company could be exposed to unnecessary financial risks.
Communication
But it’s not just about communicating with internal departments, effective communication with external parties such as financial institutions and regulators is also crucial. In today’s highly regulated financial environment, a failure to properly communicate with regulators can lead to significant penalties. Similarly, poor communication with financial institutions can lead to higher borrowing costs and a lack of access to the financial markets.
Communication is not just about broadcasting information; it’s also about listening, understanding and interpretation. A good corporate treasury professional must be able to listen actively and understand the needs and concerns of all stakeholders, whether they are internal or external. This requires not only strong verbal and written communication skills but also the ability to read between the lines and understand the underlying motivations of others.
Moreover, in order to make sure that the communication is effective, it is important to have a transparent communication process, where all the stakeholders have a clear understanding of the potential of FX flucations and their roles & responsibilities in mitigation. This can be achieved through regular meetings, clear guidelines and protocols. This might, by the way, also be the case for other types of risk, for example liquidity.
Conclusion
In conclusion, effective communication is the backbone of successful currency management within a company and its corporate treasury in particular. It allows for the smooth coordination of activities and decision-making among different departments and stakeholders, both internal and external. A corporate treasury professional must have strong communication skills and the ability to understand the needs and concerns of all stakeholders to be successful. Remember the quote goes, “The single biggest problem with communication is the illusion that it has taken place.”
