Payment Revolution Foreign Exchange

Managing FX Risk

Navigating foreign exchange risk is a critical part of everyday business. Yet few Australian mid-sized companies are adequately prepared to weather unexpected currency swings.

In this report from the Payment Revolution series, American Express interviewed more than 350 CFOs on their approach to cross-border transactions, their understanding of currency risks and their appetite to develop strategies for regaining FX control.

This report outlines how globally-minded CFOs can better balance the risk and reward of cross-border payments through better currency risk strategies and deploying a range of emerging financial tools. Importantly it highlights the significant changes impacting the management of FX, and the innovative approaches Australian companies are taking to drive the Payment Revolution.

Payment Revolution found that more than 65% of companies are increasingly looking overseas to help grow their business. Worryingly, at least when it comes to currency risk, not enough CFOs have the right tools in place to tackle foreign payments. Some 55% of businesses said they were not effectively managing their currency exposure. In addition, more than half of organisations said they had experienced financial loss due to FX volatility, with the average cost of each adverse event was $23,500.

Unfortunately, this report finds many Australian businesses are using outdated approaches to protect themselves from FX risk. Only 33% of financial executives have updated their business’ FX risk policy within the past three years, 57% said it had been even longer since their strategy had been reviewed and  10% didn’t have any form of risk policy in place.

This report also contains insights from American Express customers and a team of our own experts from the Asia Pacific region. They provide insights into the need for greater innovation in the sector, better risk planning and removing some of the antiquated bureaucratic processes that currently impede Australian CFOs


Download the whitepaper using the form on this page to explore how and why it is important for Australian companies to review their approach to foreign exchange.

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