For many finance and treasury teams, FX risk has long been treated as an irritant rather than a strategic threat – something to be dealt with periodically, dusted off when markets lurch, then dropped down the priority list once conditions settle again. The problem, as Alpha Group’s latest FX survey makes clear, is that market conditions are no longer returning to any kind of normality. Volatility is structural – and yet the way many organisations govern, model and operationalise FX risk remains rooted in a calmer era.

A worrying disconnect is emerging between how material FX risk has become for businesses and how seriously it is (or rather isn’t) being governed. Nearly two-thirds of finance professionals expect currency volatility to rise in 2026, yet more than half of large companies still do not embed FX risk policy at board level. What’s more, almost nine in ten do not systematically stress-test their FX exposures. And close to half continue to rely on spreadsheets as a primary treasury management tool, even for currency risks.

These eye-opening stats come from Alpha Group, now part of Corpay Inc., and its Countdown to 2026 – Risk Management Insights report – a recent survey of 200 senior finance leaders across mid-sized and large internationally active organisations. Sadly, these figures are not simply a reflection of resource constraints or technology lags. Rather, they point to something much more fundamental that is lacking.

As Lisa Dukes, Co-Founder at Dukes & King, puts it: “Operating without a board-approved FX risk policy in today’s environment is a governance failure first and foremost – without a formal policy, oversight is compromised. Cultural factors may play a role, but governance sets the tone. Boards need to own this risk.”

David Swann, Global Director of Partnerships at Alpha Group, argues that many organisations aren’t yet taking that ownership through policy as they are still framing FX as an operational issue rather than a strategic one. “If you go back five years, a lot of FX volatility was more seasonal – you could anticipate central bank announcements and plan around them. What we’re seeing now is much more structural. Geopolitical events can drive sharp moves with very little warning, and that changes the kind of planning businesses need to do.”

That shift has profound implications for governance, he believes. In organisations where FX policy exists only at treasury or middle-management level, escalation often becomes ad hoc precisely when speed and clarity are most critical. “Markets move quickly – and they don’t wait for people,” Swann notes. “If you don’t have board buy-in and clear authority delegated in advance, decision-making slows at exactly the wrong moment.”

Dukes takes this further, stressing that policy without ownership is largely symbolic. “An effective FX policy should articulate clear objectives, define permissible instruments, set hedging ratios, and outline escalation protocols. It should align with the organisation’s risk appetite and be subject to regular review. Crucially, implementation depends on embedding the policy into day-to-day workflows and securing senior sponsorship – otherwise, it risks becoming a static document rather than a living discipline.” The FX Global Code offers a robust framework to ensure all areas of good practice are addressed, she adds.

Stress-testing and the illusion of control

If governance gaps expose organisations to strategic blind spots, the lack of stress-testing among survey respondents reveals a deeper behavioural risk – false confidence. According to the report, 89% of organisations do not systematically stress-test their FX exposures under scenario analysis.

For many, this is not because they believe stress-testing is unnecessary, but because they assume they will be able to react quickly enough when markets move. “That’s ultimately where the danger lies,” says Swann. “By the time you’re reacting to a material FX swing, the damage is often already done. People overestimate their reaction time and underestimate how quickly margin pressure can translate into cash-flow pressure.”

Importantly, the stress testing issue is not about predicting the future – a point both Swann and Dukes emphasise – but about understanding vulnerability. A ten percent swing in a major currency pair is no longer a tail event. For businesses operating complex international supply chains, it can reshape input costs overnight.

“When nine out of ten firms don’t stress-test, they’re effectively assuming stability in inherently volatile markets,” Dukes explains. “Just because a market is calm today doesn’t mean that will remain the case. This creates hidden risks in forecasts and liquidity planning. Stress-testing isn’t about prediction, it’s about resilience. As such, companies should adopt scenario analysis as standard practice to avoid being blindsided.”

What makes the finding more troubling is that the barriers cited (such as lack of time, expertise, or technology) are themselves symptoms of under-prioritisation. Scenario analysis is still treated as optional, rather than as a core component of financial planning.

Expecting volatility but not building for it

Perhaps the most revealing contradiction in the survey is that while 63% of finance leaders expect FX volatility to rise in 2026, very few are materially changing how they manage risk. In effect, organisations are acknowledging the storm clouds while continuing to sail as if conditions will remain benign.

“For me, this is the biggest disconnect in the survey results,” Swann admits. “Finance leaders and treasurers – well-informed people – are saying volatility will increase, but they’re not building in resilience. That’s partly because FX risk competes with so many other priorities, and partly because it’s still seen as something you deal with when it hurts.”

Dukes argues that this mindset needs to evolve beyond ‘set and forget’ hedging. “If most leaders expect volatility to rise, hedging strategies need to evolve. Dynamic hedging, layered approaches, and use of options deserve more attention. Resilience isn’t just about instruments, it’s about governance, agility, and clarity on who owns FX risk.” 

Of course, dynamic hedging requires active involvement and frequent monitoring, but as Dukes notes, “it can ultimately save time when markets move unfavourably.” And while setting parameters for a dynamic strategy may seem overwhelming due to endless options, the key, she believes, is to focus on material risks and implement processes that address them effectively. “FX utopia can always follow!”

Importantly, neither expert advocates for complexity (at least not for its own sake). In fact, Swann notes that over-engineering can be as unhelpful as inaction. “For some businesses, a simple forward strategy is exactly the right answer. The key is that the decision is deliberate, aligned to risk appetite, and supported by scenario analysis – not reactive or opportunistic.”

The spreadsheet paradox

Naturally, technology plays a central role in this broader conversation, not because spreadsheets are inherently flawed, but because they are being stretched far beyond their design limits. Here, the survey shows that 48% of organisations still rely on spreadsheets and manual processes for managing FX exposures.

“There’s an operational risk straight away – version control, manual input, human error,” Swann explains. “But the bigger issue is speed. Markets are fast and spreadsheets are slow. If your data is hours or days out of date, you’re making decisions on something that may already be irrelevant.”

Meanwhile, Dukes is careful to avoid blanket condemnation. “Not all spreadsheets are created equal. They can support considered modelling, particularly in smaller organisations. But relying on them to manage live exposures can also introduce significant operational risk. Dedicated treasury systems – which could include Excel-based modelling with more advanced controls – provide audit trails, real-time visibility, and robust control features, aligning with the principles of the FX Global Code.” Moving beyond basic spreadsheets isn’t about luxury, she says, it’s about reducing risk and ensuring resilience.

What emerges from this discussion is not a technology arms race, but a maturity question. As organisations grow and international exposure deepens, the analytical and control frameworks supporting FX risk need to evolve in parallel. When they do not, vulnerability accumulates (often unnoticed until a crisis occurs).

Shifting from reactive to systematic 

If there is a unifying thread running through the survey findings, it is arguably that of fragmentation – across FX risk ownership, data, and accountability. After all, in smaller organisations, FX often sits between finance, procurement, commercial teams and treasury, with no single function fully accountable.

“That blurred ownership is a real problem,” Swann says. “FX impacts the cost base, but it doesn’t always ‘belong’ to anyone. Without clear accountability, you end up with reactive behaviour rather than systematic management.”

Dukes agrees, pointing to mindset as the final barrier. “Progress is slow because ownership is fragmented and technology adoption lags. A systematic approach requires clear accountability, integrated systems, and a shift from ‘hedge when it hurts’ to proactive risk management. Governance frameworks and adherence to the FX Global Code can accelerate this transition by demonstrating rigour and best practice to senior stakeholders.”

It’s important to note, though, that ‘systematic’ does not mean ‘rigid’. It means having clear parameters, stress-tested assumptions, and authority delegated in advance – so that when volatility hits, action is measured rather than panicked.

As Swann puts it, “Being systematic beats being heroic. Resilience comes from the processes and systems you’ve already built, not from trying to fix things in the middle of a market shock.”

Easing the FX pain

In summary, the Alpha FX survey does not reveal a sector asleep at the wheel. Finance leaders are acutely aware of the risks ahead. What it exposes instead is a lag between awareness and action – a hangover from an era when volatility could be treated as temporary rather than structural.

Bridging that gap does not require perfection, nor does it demand that every smaller organisation build a fully-fledged in-house treasury function overnight. It does, however, require FX risk to be treated with the same seriousness as liquidity, funding and credit – governed at board level, stress-tested routinely, and supported by tools and processes that reflect the reality of today’s markets. After all, in a world where volatility is no longer the exception, FX resilience can no longer be optional.