Arvest, Intrust Tackle Foreign Market Banking

Doing business with foreign customers and suppliers will be easier for Northwest Arkansas entrepreneurs with the addition of international banking to the market.

Arvest Bank Group Inc. and Intrust Bank NA of Wichita, Kan. — which has assets of more than $3.46 billion — are now offering customers knowledge, connections and expertise in dealing abroad.

“Northwest Arkansas has a growing need for international banking services,” said Anna Anderson, executive vice president for international banking at Intrust.

Arvest began its foray into international banking in January when it appointed Marta Morrow, senior vice president, as manager of the bank’s international department in Tulsa.

Intrust opened a loan production office in the World Trade Center building in Rogers in November, and hired Jerry Carmichael as senior vice president of commercial lending. The Kansas bank has worked with customers and other banks in Northwest Arkansas for many years, Anderson said. The expanding market and entrepreneurial spirit of the area were attractive enough that the bank wanted to have a physical presence in the area.

“I think we have a base of understanding and knowledge because we are familiar with the market,” Carmichael said. “So we have a little bit of an edge.”

One major international banking need that banks handle is issuing import and export letters of credit. These are financial instruments that help lower risks for both parties in an international transaction involving ordering and paying for goods

The need for a letter of credit usually comes up when two parties don’t know each other well enough to trust that goods and payments will be shipped exactly as promised in a timely manner. It functions as a transfer of title document, and assures the purchaser that a shipment is on a vessel and on its way.

A letter of credit also gives the vendor assurance that an order placed will be paid for, and additionally, they can use it as a financing instrument.

There are other needs that can be met when a bank has formal connections with foreign financial institutions. Any time a customer is accepting payments in a foreign currency, there are risks. This is especially true when dealing with fixed pricing such as with catalogs or when there is a long lead-time on when a product will ship.

Intrust helps its customers mitigate those risks by going over all of the details.

“There are a number of variables to understand what the risk is and how to mitigate it,” Anderson said.

Another area of concern is with foreign checks. Check clearing rules in other countries aren’t always as tightly regulated as they are in the United States, Anderson said. Intrust can offer its customers faster clearing times for foreign checks, which is important in maintaining good cash flow.

“We’re not just order takers,” she said. “We do whatever our customers need and we like to be an advocate for them.”

Various east coast banks are competing for the international banking business of many companies in Northwest Arkansas, which is one reason Arvest decided to offer international services, Morrow said.

The department is small right now, with a staff of two people, but that will grow in the coming years.

“We have to keep up with the technology or we won’t be able to sustain the growth banks are experiencing and also meet our customers’ needs,” Morrow said.