Technology and people play equal roles in providing treasury teams and their organizations with the resiliency to effectively manage risk.
This is one of the findings from the 2021 AFP Risk Survey Report, prepared by the Association for Financial Professionals with support from Marsh McLennan. The survey examines treasury and financial professionals’ views on the top business risks over the next 18–36 months and captures risk management lessons from the impacts of the Covid-19 pandemic.
The acceleration of trends such as the rapid shift to digitize processes and business models and changes in the way we work are creating new risk dynamics. As a result, organizations are increasingly exposed to increased cyber-threats like ransomware attacks. While cyber risk can never be eliminated, financial professionals are well placed to identify, quantify and help manage it for their organizations.Leslie Chacko, Managing Director, Marsh McLennan
The top risks facing business
- Cybersecurity risks continue to be the most challenging to manage (cited by 47% of respondents).
- Strategic, business operations interruptions and macroeconomic risks are expected to have the greatest impact on organizations’ earnings.
Risk management learnings from the past 18 months:
- Treasury teams will focus on managing cash flow, working capital and liquidity (79%) to withstand future risks.
- Building data and appropriate tools (cited by 83%) and investing in technology to improve communication/collaboration with internal stakeholders (79%) is vital.
- Managing people effectively is key to withstanding future crises (84%), including equipping teams with the right technology and skills to adapt to shifting demands.
Practitioners are evolving into a more strategic role
Forty-seven percent of respondents agree that in the past 12 months, those managing risks at their organization have grown into a more strategic role. In the past year, treasurers had to step forward and communicate the impact the crisis might have on their company’s bottom line. Treasurers needed to connect the dots and formulate a collective view of the impact of the crisis on the business and communicate that perspective to the C-suite in collaboration with other functions.