From the July-August 2009 issue of Treasury & Risk magazine

Working Together on Risk

These days treasurers don't just worry about interest rates or foreign exchange risks, but also the creditworthiness of banks and a range of other risks. As managing risk moves higher on treasurers' to-do lists, technology companies are taking note. For example, workstation provider Kyriba struck a deal with FXpress in June that gives clients access to FXpress's risk management solution. "The focus on risk is very much increasing and becoming more and more central to treasury

groups," says Jud Murchie, an analyst with financial services consultancy Aite Group. "It comes from just the nature of an evolving global economy. Companies are dealing in more currencies, and risks emerge and companies need to respond."

Elizabeth St-Onge, a managing director at consultancy Treasury Strategies, says corporate scandals like Enron, the Sarbanes-Oxley legislation and current market conditions have combined to focus treasuries on not only financial risks but also operational risks. "One little error in treasury could have a massive impact on the financial well-being of the firm as a whole," she points out.

Meanwhile, St-Onge says, in an increasingly competitive market for treasury technology, "the vendors want to provide the full and complete solutions that corporations are starting to ask for."

In fact, Kyriba vice president Scott Montigelli says the company was getting a lot of requests for help in managing its clients' interest rate, foreign exchange and commodities risks, and those requests led to the alliance with FXpress. Jim Gilbert, vice president of sales and marketing at FXpress, says the deal provides treasuries with "the best of breed in cash management and risk."

Both FXpress and Kyriba use a software-as-a-service (SaaS) approach, and Montigelli says their technical teams are working to integrate the two systems. Lisa Tana, manager of global treasury operations at the Interpublic Group, an advertising company that does business in more than 100 countries, already uses both Kyriba and FXpress and expects the alliance will result in streamlined processing of payments for the foreign exchange trades she does through FXpress.

The partnership between Kyriba and FXpress echoes workstation vendor Wall Street Systems' deal last fall with risk management provider Reval. And Murchie points out that another treasury technology company, IT2, provides dynamic process maps that can help clients comply with regulatory requirements.

"There's the operational and process side, as well as financial risk management," he says. "Both are becoming more and more important, and both need to be addressed."


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