Key global trends shaping corporate FX hedging in 2026

Why Is Global Hedging Activity Increasing?

FX risk management has moved firmly up the corporate agenda as 88% of businesses now actively hedge their currency exposure, a jump up from 81% the previous year. Importantly, sentiment amongst non-hedgers is also shifting, with nearly two-thirds now considering implementing FX strategies.

This pronounced shift comes despite a materially higher cost environment. Hedging costs have risen by a mean of 67% globally, with increases soaring to 76% in North America. Notably, 15% of corporates report cost increases of more than 100%, underscoring the growing financial pressure on businesses.

At the same time, liquidity conditions have tightened. 42% of global businesses report stricter lending criteria and nearly three-quarters (72%) are grappling with hikes in interest rates or fees.

Yet these barriers have not deterred adoption. Instead, they have reinforced the strategic importance of risk mitigation through optimised hedging strategies. With 62% of corporates reporting negative financial impacts from currency volatility over the last year, the cost of remaining unhedged is becoming increasingly explicit. As financing conditions remain tight and fluctuations continue to materially affect performance, structured FX risk management is becoming a core component of corporate financial resilience.

What FX Operational Challenges Are Firms Struggling to Overcome?

When firms were asked about their most pressing FX operations challenges, a quarter of respondents cited obtaining comparative quotes, an issue that is particularly acute in North America, and struggling to demonstrate best execution. In fragmented liquidity environments, where FX pricing is dispersed across multiple counterparties and platforms, firms often lack an efficient way to source and benchmark rates, making it more difficult to evidence execution quality.

These pressures are compounded by the persistence of manual processes. Almost a third of firms (31%) identified automation of manual workflows as a priority, yet legacy communication methods remain widespread. Globally, 34% of corporates still use the phone to instruct FX transactions and 29% rely on email. In the UK, reliance on manual instruction is even more pronounced, with 40% using phones and 42% using email.

With manual channels so deeply embedded in FX workflows, firms face elevated operational risk, slower execution in volatile markets, and a reduced ability to audit decisions retrospectively. In periods of heightened currency volatility, even minor delays or documentation gaps can materially affect outcomes.

Why Are More Corporates Outsourcing FX Management?

Faced with rising costs and fragmented operational complexity, a growing number of corporates are concluding that managing FX entirely in-house is no longer viable, or desirable. The data reflects this decisively, with fewer than 1% of firms surveyed stating they do not currently outsource their FX processes, indicating near-universal adoption and recognition of its value.

When asked what drives outsourcing decisions, the leading motivations were access to specialised expertise and enhanced efficiency and automation (30%) - a pairing that speaks directly to the skills and operational gaps identified elsewhere in the data.

Specialist providers can often offer access to deeper liquidity, more competitive pricing, and dedicated execution expertise that most corporate treasury functions may struggle to replicate alone. Many also bring ready-built automation capabilities, allowing firms to immediately benefit from end-to-end streamlined workflows and technology-led execution without the overhead of building it internally.

“As FX management becomes more data-driven and technology-led, many corporate teams are increasingly lacking the specialist skills, as well as time, to manage risk, pricing and execution simultaneously. Combined with cost pressures, it’s no surprise that the vast majority of firms are now outsourcing FX processes to minimise additional headcount or balance sheet strain.”

Tom Hoyle, Head of Corporate Solutions at MillTech

What Role Do Automation and AI Play in FX Risk Management?

Artificial intelligence and automation are rapidly reshaping how corporations manage foreign exchange risk, and the data makes clear this is no longer a future ambition, but an operational priority. Every corporate surveyed is actively considering automating elements of their FX processes, with 99% also exploring AI integration.

When it comes to automation, trade execution (33%) and price discovery (32%) top the list of priorities. Streamlining these workflows helps firms to systematically source competitive pricing, optimise execution, and generate robust, time-stamped audit trails - strengthening best execution compliance while dramatically reducing the human error, delays, and inconsistent decision-making that can plague manual processes.

But the role of automation and AI in FX risk management stretches well beyond operational efficiency. AI is increasingly being deployed as a strategic tool for anticipation and insight, a fundamental shift in how treasury teams think about currency risk. Across all regions, the leading AI use cases identified were process automation (42%), risk identification (40%), and risk management (39%). Together, these priorities signal a decisive move away from reactive FX management toward proactive, data-driven strategy.

By processing vast volumes of market, exposure, and transaction data in real time, AI-powered tools are enabling firms to detect emerging risks earlier, stress-test scenarios with greater precision, and make more informed hedging decisions - before currency volatility forces their hand.

What Does the Future of FX Risk Management Look Like?

The trends captured in this year's data point toward a future where FX risk management is faster, smarter, and significantly more automated - but also more demanding in terms of the technology and expertise required to execute it effectively.

AI will play an increasingly central role, moving beyond process automation into genuine decision support. The next generation of FX tools is already delivering on this - transforming raw exposures into actionable insights, simulating hedging strategies across alternative FX and liquidity scenarios, and helping treasury teams understand the real impact on cashflows and performance markers. For treasury teams, this promises not just efficiency gains but a fundamentally more informed approach to managing currency risk.

The firms best positioned to benefit will be those that address their operational foundations. That means moving away from inefficient manual instruction methods, fragmented service relationships, and legacy workflows that struggle to keep pace with the speed and complexity of modern FX markets. Corporates appear to recognise this - when asked what type of FX solutions would best meet their needs, 26% favoured a digital, multi-bank FX platforms with advanced automation, reflecting a clear and decisive appetite to move beyond traditional bank-led models.

In an environment where currency volatility can move quickly and decisively, the gap between firms with robust, technology-led FX strategies and those still relying on legacy processes is only going to widen. The data from 2026 makes one thing clear: the time to act is now.

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