Forex Management Insights
Why a Strong FX Treasury Foundation is Crucial for Business Success
Most businesses know FX volatility is a problem. Far fewer have a plan to deal with it. Ultimately, what separates resilient companies from reactive ones is a structured FX treasury foundation—clear strategy, solid governance, and the tools to act at speed.
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Nicky Strydom
- 3 minutes read
In a world of unpredictable currency movements, a strong FX framework isn’t a luxury—it’s a necessity. Businesses operating across borders face constant pressure from volatile exchange rates, shifting regulations, and fragmented decision-making. As a result, without clear policies, a structured FX treasury foundation, and trusted stakeholder relationships, the risks can quietly erode profitability.
With over 40 years of expertise supporting businesses navigating complex global markets, we’ve identified the key elements that underpin a resilient FX treasury foundation—and why now is the time to get them right.
What Is a FX Treasury Foundation?
A FX treasury foundation refers to the strategic, policy, and operational structures that support a business’s foreign exchange management. It includes six interrelated components:
- Strategy – aligning forex with business objectives and risk appetite
- Policy – creating rules and frameworks for consistent decision-making
- Technology – using systems that support analysis, execution, and reporting
- Structure – defining roles, responsibilities, and communication lines
- Relationships – working effectively with brokers, banks, and internal teams
- Regulations & Country Norms – navigating cross-border compliance environments
Consequently, without these in place, organisations often end up reacting to market shifts instead of managing them strategically.
“Behind every sustainable, successful business, you’ll find a clearly defined strategy—and within that, a forex structure that’s built to last.” ~ Sharon Constançon, CEO | Valufin
Why Building a FX Treasury Foundation Matters
Aligning FX Strategy with Business Direction
Many businesses treat FX as a transactional task, but it should be strategic.
A 2025 Finastra report reveals the high cost of getting FX wrong: 47% of global financial executives say failed or delayed cross-border payments severely impact customer retention, while 50% admit losing over 2% of their customer base due to FX-related transaction failures. For SMEs, the message is clear—currency misalignment isn’t just operational friction; it’s lost revenue.
In turn, a strong FX treasury foundation helps align currency exposure decisions with business goals. For example, understanding how billing currency impacts pricing strategy or how FX risk affects supply chain competitiveness enables better-informed decisions.
Policy and Delegation Reduce Hidden Costs
Without a clear forex policy, businesses face inconsistent execution, decision bottlenecks, and missed opportunities. A defined policy includes hedging strategies, tolerance thresholds, and clear escalation protocols, ensuring everyone knows their role and authority in a fast-moving market.
The Finastra report also highlights that US merchants lost $3.8 billion in 2023 alone due to failed cross-border transactions, often caused by currency misalignment or policy breakdowns. Businesses that build a well-governed FX framework are not just being prudent, they’re making a financially urgent move.
Structure Enables Better Decision-Making
Whether you’re a two-person treasury team or a multinational finance function, your FX treasury foundation must support transparency, delegation, and control. Organisations that clearly assign roles and build incentives into their structures make faster, smarter FX decisions.
Technology Supports, but Humans Decide
However, spreadsheets alone aren’t enough. Using treasury management systems, reporting dashboards, or ERP integrations helps monitor positions and trigger action. But strategy still requires human judgment, especially in volatile environments where algorithms may not capture nuance.
Featured Webinar Replay
In this webinar replay, our CEO, Sharon Constançon, explores the first stage of the VALUFIN Framework—Value (Structure). Sharon outlines the essential components that underpin an effective forex treasury operation, from policy development and stakeholder engagement to regulatory understanding and technological integration.
Whether you’re setting up your forex structure or assessing your current approach, this session will provide you with a grounded, strategic lens on how to build—and sustain—resilience in your foreign exchange management.
Practical Steps to Strengthen Your FX Treasury Foundation
- First, review your current strategy – Is it aligned with your business’s risk appetite and growth objectives?
- Audit your policies – Are roles, tolerances, and hedging rules clearly defined?
- Assess your technology – Do your systems support real-time insight and execution?
- Map your internal structure – Are the right people empowered to make decisions quickly?
- Evaluate key relationships – Are your brokers, banks, and internal teams aligned?
- Understand your compliance landscape – Are you operating within country-specific norms and regulations?
The Bottom Line: Your Foundation Determines Your Resilience
A reactive approach to foreign exchange will always cost more, financially and strategically. But with a well-structured FX treasury foundation, businesses gain clarity, control, and confidence to navigate global markets.
In an environment where failed cross-border payments cost businesses an average of $12 per transaction, every misstep adds up. Organisations that take FX treasury seriously will be better positioned to protect profit and customer trust.
Whether you’re just getting started or reassessing your current framework, taking action to strengthen your FX foundation could be one of the most valuable decisions your business makes.
Valufin empowers your organisation with tailored insights, expert execution, and technology-driven solutions. Let’s transform uncertainty into opportunity.
Ready to strengthen your FX treasury foundation?
Partner with Valufin to build structure, clarity, and resilience into your FX strategy. Get started today.
