Risk Management Strategies Crucial for Financial Institutions in Canada
In today’s evolving global economy, financial institutions in Canada are facing an increasingly complex array of financial risks. Volatile foreign exchange rates, fluctuating interest rates, and commodity price uncertainty are just a few of the factors that are making it challenging for companies to manage their risk exposure.
Identifying Strategic Objectives and Risk Appetite
According to experts at PwC Canada’s financial risk management team, companies can increase their economic resilience by starting with their strategic objectives and risk appetite. By identifying and pursuing new opportunities through enhanced understanding of their exposure and risks, organizations can protect and create value.
Multidisciplinary Support for Financial Institutions
PwC Canada’s multidisciplinary team of experts provides comprehensive support to financial institutions in all aspects of financial risk management, including:
- Policies and strategies
- Processes and controls
- Technology selection and implementation
- Valuation and risk modelling
- Financial reporting
Hedge Accounting and Economic Hedging Strategies
The accounting rules and disclosure requirements related to financial instruments are diverse and complex, creating practical issues for companies. PwC Canada’s team can assist with:
- Hedge accounting
- Design and development of economic hedging strategies
- Analysis of accounting treatment, presentation, and disclosure requirements for new debt/equity issuance and innovative financing transactions
Financial Risk and Valuation Models
Complex financial instruments also give rise to many financial risk and valuation issues, which require intricate valuation and risk models. PwC Canada’s team can:
- Develop best-in-class model risk management frameworks
- Develop and validate financial risk and valuation models
- Assist with audit procedures in areas like model risk management and quantitative model testing
Treasury Strategy and Organization
In addition, the expanding risk landscape is placing treasurers and chief financial officers under increased pressure to stay on top of current and emerging issues. PwC Canada’s team can help with:
- Treasury strategy and organization
- Treasury internal audit
- Cash and liquidity management
- Risk management
- Treasury technology
- Deal support
Importance of Treasury as a Strategic Function
According to the 2021 Global Treasury Survey, Canadian companies are increasingly recognizing the importance of treasury as a strategic function. The survey found that:
- 75% of respondents believe that treasury is becoming more important
- 60% cite increased focus on risk management
- 55% highlight the need for improved process and controls
Expert Guidance and Support
As financial institutions in Canada navigate this complex landscape, PwC Canada’s financial risk management team stands ready to provide expert guidance and support.