Financial risks present increasing challenges forcorporate treasurers, with 58.8% of the treasurers who responded toa recent survey by consultancy TreaSolution saying financial riskmanagement has become more difficult over the last year, up fromthe 44.9% who said that in 2011.

The heightened concern probably reflects a range of issues,including the European debt crisis and the prospect of newregulations regarding derivatives, says Daniel Carmody, managingdirector of Chicago-based TreaSolution.

“If you're an international company active in Europe, obviouslythe risk in Europe is something you need to take intoconsideration,” Carmody says. “Regulation-wise, that's going to bea concern, and the ambiguity that's associated with that will be aconcern. It's just the overall environment for financial riskmanagement becoming more difficult for practitioners.”

In spite of the threat that Europe's debt crisis poses to thecontinent's common currency, just 60.7% of treasurers say theirorganizations currently hedge foreign currency risk, down from70.4% in 2011. Carmody notes that companies that only do businessdomestically have no need to hedge FX risk.

Other areas of concern include insurance risk management, with44.4% of the 56 treasurers surveyed saying it has become moredifficult over the last year. On the other hand, 22.5% say debtmanagement became easier over the last year, vs. just 18.4% whoview it as more difficult.

The survey suggests that corporate treasuriescontinue to reduce the number of their banking relationships andbank accounts. On average, the respondents had 15.4 bankingrelationships in 2012, down from 23.5 in 2007, and 190.9 bankaccounts, down from 245.9.

“Organizations are concentrating their efforts with strategicbanking partners,” says Carmody, and links that trend to concernsabout financial risk. “They're looking at counterparty risk andsaying, 'Exactly who should we be doing business with?'”

While 91.1% of treasurers say they monitor and analyze theirbank fees, 90% of those who do so still rely on spreadsheets. “Thatis an area where there has been a lack of automation,” Carmodysays.

And although there are frequent bank announcements these daysabout applications that allow finance executives to take care ofbusiness using their mobile devices, just 26.8% of treasurers saytheir organization would benefit from mobile banking services.

Carmody points out that a lot of treasury staffers spend most oftheir time in the office. “The vast majority of practitioners whoare working day in and day out at their offices, they're sayingthis isn't something that will be applicable.”

For a look at the challenges that most concern corporaterisk managers, see Volatility Tops List of Risks.