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International Banking

International Banking Sometimes Crosses Paths With Offshore Banking

The concept of international banking often crosses path with that of offshore banking. However, although the two forms of banking may complement each other in the concept that is referred to as international offshore banking, international and offshore banking fulfill two fundamentally distinct functions.

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Although an international bank can be based abroad or offshore in that it is a branch or subsidiary of a main bank, they do not operate as offshore entities which are entitled to limited government interference, strong banking secrecy and tax privileges, except if granted an offshore banking license by the government of a given jurisdiction which enables it to function both as an offshore and international bank – hence, an international offshore bank.

Unlike offshore banks are basically used for privacy and tax saving purposes, an international bank tends to generally deal with direct trading matters such as issuing letters of credits to importing and exporting companies, export receivables finance, programs provided by development banks and organizations that are based within a specific region, advanced payment and specially designed pre-export facilities, the outsourcing of trade documentation, forfeiting and government backed guarantee and insurance programs.

International banking services such as corporate, current, private and personal accounts are provided by both offshore and international banks, but contain the main difference of tax issues in that international bank accounts are more vulnerable to the scrutinized by both local and international tax authorities, whereas in an offshore bank, scrutinizing or divulging the details of an account holder has to be based on the grounds of proof or suspicion of illegal activity. In both instances, however, investigative processes are conducted with complete discretion and due diligence procedures are followed in order to prevent the exploitation of international banking facilities, both onshore and offshore for illegal purposes or criminal activity.

International baking is daily being required to accommodate and facilitate the increasingly complex and individual international banking needs of its customers. Electronic banking has thus been a major catalyst in the advancements that international banks and the caliber of services that have been provided throughout the years. Internet or online banking does not only seek to facilitate banking through convenient, speedy and user friendly systems, but ensures that banking acquires the global feature that allows people and companies to perform transactions in any part of the world. Electronic innovations within the international banking sector is the element that provides access at ATMs worldwide, transferring funds and receiving payments through a number of banking facilities whether it be chequing, online, credit and debit cards, telegraphic transfers, virtual or mobile banking.

Online banking services provided by international banks are increasingly including more and more international banking products that would typically be dealt with only on a one on one basis. Some of these include regular access to trained customer services international banking staff that provide reliable and one on one consultancy with customers. International banking has acquired a personal touch which ensures that customers requiring step by step guidance into making financial decisions are given. International bank account holders with either large sums of deposits or are looking for ways in which investments can be made are also provided with a series of bespoke services to suit their needs. Some of these services include risk management, succession and investment planning. Depending on a customer’s financial demands, international banks make available a range of investment possibilities such as fixed term deposits which are set on overnight, yearly or monthly dates of maturity.

Such international banking options allows customers to not only deposit funds but obtain secured returns of their deposits while taking strict financial decisions and measures that enable them to secure a certain amount of cash for making a particular investment or achieving a given amount of liquidity.

One of the most intriguing services of international banks are forex or FX services which enable companies and business people to plan their trading activities and financial acquisitions over an established period of time. FX service such as spot and forward services allow businesses to obtain a certain amount of cash in a given foreign currency at a specified time and foreign exchange rate. This allows traders to operate with confidence which is often lost as a result of the uncertainties of international markets, particularly currency fluctuations, which can incur losses of large amounts of money and can influence drastic changes in prices and profits. By investing in reliable FX services provided by well established and reputable international banks, traders are given the opportunity of better calculating their expenses and earnings based on figures that are fixed through FX contract services.

Performing transactions on both regional and international levels are again facilitated by international banks which make multicurrency options available to their customers. International bank accounts and cheque books can be set up in a variety of international currencies. This enables trade to be performed directly in the currency where a particular good or service is being bought. Likewise, multicurrency international bank accounts stand a better chance of providing returns to account owners due to the fact that funds placed in currencies with a higher value than one’s own national currency will produce higher yields. Interests earned from an international bank account can either be withdrawn and used as desired, reinvested into the account or used to open another international bank account, such as a corporate or current account in the case where only a personal international banking account is held. This provides a forum which allows funds to accumulate without necessarily being obligated to invest more of one’s personal or company income into an international account if the majority of funds are tied up in long term investment projects.

Overdraft, loan, mortgage and trade financing facilities that international banks offer do not only assist people and companies locally but internationally as well. Banks which are able to establish an international presence and expand the value of its capital assets and liquidity provide credit which is much needed to both individuals and companies in a regular basis for various reasons. By being able to provide valuable services that are so far reaching in terms of making finance available as well as helping to structure trade and market activities through secure investment and payment methods and practices, international banks are of tremendous value to the international economic system.

 


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