Reval Finds Quarter of FTSE 150 Treasuries Inadequately Prepared for Financial Volatility

Study finds 45% say risk is top priority, but 26% have no automated treasury management technology in place

London, 11 June 2012 – Reval, leading global provider of comprehensive and integrated Software-as-a-Service (SaaS) solutions for Treasury and Risk Management (TRM), has found that a quarter of treasury departments among the top 150 companies that trade on the London Stock Exchange do not appear to be adequately prepared for financial volatility. The survey of FTSE 150 companies found that 26% of firms had no automated treasury management technology system in place, leaving companies unable to adequately handle a multitude of risks, such as liquidity risk, compliance risk, fraud risk, commodity risk and, particularly in light of ongoing uncertainty in the Eurozone, counterparty risk.

“The crisis in the Eurozone has been on the UK’s doorstep for the past 18 months, and yet many of Britain’s largest companies still rely on old systems and manual processes to manage risk,” says Nigel Sirett, EMEA Managing Director of Reval. “But this is about more than just the potential collapse of the Euro; all major companies should have up-to-date processes and systems in place so they can quickly and easily see their entire cash and risk management picture. Without a proper framework for risk management, calculating counterparty risk exposure, for example, which was such a concern in 2008, and is again today in the Eurozone, could take days instead of hours. This is the situation that a quarter of Britain’s top companies find themselves in today.”

The study also showed that of those companies that do have a TRM system in place, 50% do not have the latest version installed. Updates that ensure companies use the latest version of their TRM system are crucial in managing risk, particularly compliance risk, which is an increasingly important concern for CFOs and treasurers as the global regulatory environment changes. By not using the latest version, companies increase their potential exposure to risk.

Other findings from the study suggest that the lack of adequate preparation is not due to a lack of awareness or concern about risk. Forty-five percent of respondents said that counterparty risk and foreign exchange exposure risk were their top priorities for 2012. Cash management (28%), improved cash flow forecasting (15%) and improved cash visibility (14%) also featured as priorities.

“The fact that 45% of companies say risk is a top priority but still a quarter of respondents do not have an adequate risk management framework in place suggests treasurers concerns are not being addressed,” Sirett continued. “What we hear from many treasurers is that they know they need to move away from manual processes and implement a more sophisticated treasury and risk management system, but staffing and funding such a large strategic initiative is a challenge in the face of day-to-day activity. This is ironic because the implementation of a TRM system is the very thing that can allow treasurers to move away from tactical process and become a more strategic asset for their organization.”

The Reval study was conducted in February and March 2012. Ninety-five FTSE 150 companies participated in the research.

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About Reval

Reval is a leading, global Software-as-a-Service (SaaS) provider of comprehensive and integrated Treasury and Risk Management (TRM) solutions. Our cloud-based software and related offerings enable enterprises to better manage cash, liquidity and financial risk, and includes specialized capabilities to account for and report on complex financial instruments and hedging activities. The scope and timeliness of the data and analytics we provide allow chief financial officers, treasurers and finance managers to operate more confidently in an increasingly complex and volatile global business environment. Using Reval, companies can optimize treasury and risk management activities across the enterprise for greater operational efficiency, security, control and compliance. Founded in 1999, Reval is headquartered in New York with regional centers across North America, EMEA and Asia Pacific.

For more information, visit www.reval.com or email info@reval.com.

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