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Visibility in Risk Management: Why Detailed Insight and Accurate Forecasting Are the Treasurer’s Best Friends March 21, 2013 Sponsored by Kyriba

Visibility in Risk Management: Why Detailed Insight and Accurate Forecasting Are the Treasurer's Best Friends

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The attendees of the full live online session have been approved for 1.2 CTP/CCM recertification credits by the Association of Financial Professionals. It is crucial for treasury to have complete visibility into cash, liquidity, forecasting, and risk exposures. Like in skiing, driving a car, or flying an airplane, knowing where you are now and what is in front of you helps ensure a smooth journey. In finance, visibility enables a similarly smooth journey of effective risk management decision-making. In our 1-hour webinar, the speaker panel discussed key areas that treasury can focus on to improve visibility and protect cash and financial positions from financial, counterparty, and liquidity risks, including: Global cash visibility Liquidity and working capital Consolidated cash forecasting Supply chain exposures Featured Speakers: Bob Stark, VP Product Strategy - Kyriba Corporation Bob Stark is responsible for global product strategy and market development at Kyriba. Bob is a 15 year veteran in the treasury technology industry having served in multiple roles at Wall Street Systems, Thomson Reuters, and Selkirk Financial Technologies including product management and strategy. Bob is a regular guest speaker at treasury conferences and an active member of the Association for Financial Professionals. Robert D. Pierson, Director – Kyriba CorporationRobert Pierson is currently the Director of Risk Management Services for Kyriba. Mr. Pierson has over 20+ years in the Treasury and Financial Derivative Markets working for and with companies such as Reval, Sungard, eSpeed, The Coca-Cola Companies, The Walt Disney Company, Ford Motor Company, and General Electric Corp. He is recognized and known as as an SME in systems implementation and process improvement for Financial Derivatives and Treasury Risk Management.

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  • 1. Visibility in Risk Management:Why Detailed Insight and Accurate ForecastingAre the Treasurers Best Friends March 21, 2013 Sponsored by Kyriba

2. Introductions Todays PresentersRobert PiersonDirector, Risk [email protected] StarkVice President, [email protected] 2013 Kyriba Corporation. All rights reserved.PRIVILEGED & CONFIDENTIAL. 2 3. Agenda1) Importance of Visibility2) Techniques to Improve Visibility Detailed Insight into Cash & Exposures Improving Forecasting Accuracy3) How Visibility Helps in Risk Management 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 3 4. Importance of Visibility 5. Importance of Visibility Visibility is an enabler; its but one step in Maslows Hierarchy of Treasury Needs Often Cash and Liquidity Exposures and Financial Positions Actuals and Projections *Visibility* Visibility Opportunity to make informed, effective decisions Borrowing and Re-Financing Investing/Cash Optimization Risk Management/Hedging 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL.5 6. Importance of Visibility For Risk Management Foreign Exchange Cash Exposures; Balance Sheet Accounts Commodities Purchases, sales, inventories, usage Counterparty Cross-asset exposure to banks, corporates, customers Supply Chain Exposure to suppliers; geographic regions 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 6 7. Importance of Visibility Cash Treasury as a strategic partner Bank reporting Cash positioning Forecasting Effective financial decisions Liquidity Financial positions Investment Global visibility Debt Intercompany Foreign exchange Financial controlsExposures Foreign exchange Interest rate Productivity Counterparty Supply chain 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL.7 8. Importance of Visibility Cash Optimization Treasury as a strategic partner Effective returns on cash Ease of money movements Efficient borrowing Effective financial decisions Treasury Structures Centralized Decentralized Global visibility Hybrid Risk Management Financial controls Financial Liquidity Counterparty Productivity Operational 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 8 9. Techniques to Improve Visibility 10. Techniques to Improve Visibility What is the barrier? 50+% of financial executives cite visibility into data as the barrier to effectively forecast risk metricsSource: 2013 AFP Risk Survey 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 10 11. Techniques to Improve Visibility Data we need for better visibility Requirements Cash Visibility Cash Forecast *Visibility* Liquidity Visibility Risk Exposures 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL.11 12. Techniques to Improve Visibility Cash Visibility Requirements Bank Reporting Cash Forecast Liquidity *Visibility* How to get? May require third-party assistance 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL.12 13. Techniques to Improve Visibility Cash Visibility Bank ReportingFormatsHow to get .csv Manual download*Visibility* BAI files FTP SWIFT MT messages SWIFT and Regional XML messages (ISO20022)Banking Networks 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 13 14. Techniques to Improve Visibility Cash Visibility Forecasting Sources Historical data *Visibility* Remote users Recurring models Future dated transactions ERP (Payables, Receivables, Budget) Treasury Teams skill and talent 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL.14 15. Techniques to Improve Visibility Cash Visibility ForecastingPath to Successa) Collaboration involving the right *Visibility*people b) Consolidation incorporating the rightdata streams c) Measurement feedback loopto measure and report onforecast accuracy 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL.15 16. Techniques to Improve Visibility Cash Visibility LiquidityRequirements Cash Visibility *Visibility* Cash Equivalents and Liquid Investments On-demand borrowing capacity Accurate calculation of borrowing headroom 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 16 17. Techniques to Improve Visibility Risk Exposures Taking Cash ForecastRisk Exposure Projections Requirements: Cash Visibility Understand what your cash is exposed to *Visibility* Currency Rates (Question: how many?) Counterparties (Regulatory Compliance vs. Business Risk) Determine impact of decision / no decision 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 17 18. Techniques to Improve Visibility Risk Exposures Most popular techniques measure potential impactTechniqueRequirementsCommon Market Data CurvesScenario/Sensitivity AnalysisMTM of Derivatives *Visibility*Advanced Simulation ModelsValue-At-Risk (VAR) (Monte Carlo)CashFlow-At-Risk (CFAR)Correlation 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL.18 19. How Visibility Helps in Risk Management 20. How Visibility HelpsGoal of Risk ManagementImproved accuracy in projecting your exposuresMore confidence in your hedging decisionsBetter protection of your financial assetsCertainty 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 20 21. How Visibility HelpsBarriers to Effective Risk Management Source: Aberdeen Group, January 2013 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 21 22. How Visibility HelpsWhy Is Cash Forecasting Such a Barrier?Importance driven by dependency on visibility into expected cash and liquidityGlobalization expansion of overseas businessIncreased visibilityuncovered exposuresCash Forecasting answers the question: How much DO I have vs. how much WILL I have? 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 22 23. How Visibility HelpsManaging data is also problematicManual effort/productivity is an issueTechnology helps deliver the visibilityAlso helps filter; transform into informationKey to success: Identify inter-dependent and waterfall effectsbetween Risk Exposures Financial vs. Counterparty vs. Liquidity vs. Operational 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 23 24. How Visibility Helps Quality Data + Quality Analysis = Better DecisionsComponents Increased Visibility into Cash Increased Visibility into Exposures Increased Visibility into Market Conditions*Visibility* Results in Increased Visibility into Operations 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 24 25. Summary Visibility creates opportunities Better Financial Decisions Improved Risk Management Best practices Technology can remove data access barriers *Visibility* Implement feedback loops to improve forecast accuracy Risk Management Highlight correlated effects to exposures in changing market conditions 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 25 26. White PaperDOWNLOAD our white paper The Treasury Mandate: AStrategic Partner for Unlocking Business Value at thislink: http://info.kyriba.com/Treasury-as-a-Strategic-Partner-SM.htmlContact Us: 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL.26 27. REQUEST A CONSULTSATIONCFOs and Treasury Professionals from over 700 companies world-wide rely on Kyriba for: Enhanced visibility into cash, forecasts, positions and exposures Better financial decision making, including Cash Optimization and Hedging Centralization of processes and controls Effective 360 reporting and moreKyribas cloud-based treasury management solution offers a broad range of functionality tosupport even the most complex treasury requirements, solving the cash, treasury, and riskmanagement needs of all sizes of treasury and finance organizations.Become a best practice treasury - REQUEST A CONSULTATION>> 28. THANKS FOR YOUR INTEREST!