International Finance Bank: At home abroad

The main event—International Finance Bank financed UFC Gym’s new location in Lauderhill, Fla. Here, the bank’s vice president and lending officer Ricardo Loor (far left) and president and CEO Jose Cueto (far right) stand with (left to right) UFC Gym Lauderhill’s general manager Jorge Poleo and owner Ricardo Mata.

Both U.S. and Latin American clients call International Finance Bank in Miami their hometown bank. President and CEO Jose Cueto tells us about how the bank serves its diverse community.

By Jolene Johnson

Living in a new country (or investing your money there) can feel overwhelming. International Finance Bank in Miami, Fla., is a financial institution that aims to help its customers feel at home. “We want to be as critical and vital in [these people’s] lives as an attorney, accountant or doctor,” says Jose Cueto, president and CEO of International Finance Bank. “We try to add value wherever possible.” That might mean making house calls by traveling to some of the Latin American countries where clients might live. “Our [value] proposition is a service-based model,” Cueto adds.

For 25 years, International Finance Bank has served the banking needs of both Latin America and U.S. residents. The $475 million-asset bank, an ICBA member, is part of Grupo IF, a six-bank conglomerate that includes Banco Exterior in Venezuela, Banco Internacional in Ecuador, Inter Banco in Guatemala, BanBif in Peru and Ebna Bank N.V. in Curaçao. “Those banks have been natural feeders of international business for Latin American clients looking to establish banking relationships in the States,” Cueto says.


The percentage of
International Finance Bank’s customers who are from Latin America

The bank’s international clients—at the individual and business level—include both those who still live in their respective countries and those who have moved to the United States. Some have come to the United States with a high net worth, and others have had to start over after leaving their countries due to political turmoil or unrest.

“We have some foreign companies that do business with the bank, and we’ve got some U.S. companies that were set up by foreigners here in the United States,” Cueto adds. “It’s a pretty well-diversified international portfolio.”

Today, Cueto estimates the bank has a 50/50 mix of international and domestic clientele; just three years ago, its international clientele was the greater of the two—75 or 80 percent, he says.

“As Latin America has experienced several different crises over the last two decades, when flight capital has left any of the countries where we had a sister bank operating, we were usually the beneficiary of that capital outflow into the United States as Latin American clients sought protection by having their money in a safer jurisdiction,” Cueto says. “It’s really the international banking story that Miami kind of has always been.”

Most recently, as the economic situation in Venezuela has deteriorated, many prominent entrepreneurial Venezuelan families have left and relocated their businesses in the United States.

Cueto believes the bank will continue to serve a 50/50 ratio of international and domestic clients because it’s part of Grupo IF. “But a lot of that is driven by macroeconomic events that are out of our control,” he says. “So, there can be an influx of capital as quickly as there can be an outflow of capital.” Because of this, International Finance Bank is also focused on its domestic market. “Having a good mix of a domestic strategy with an international strategy means that you can really control your growth,” Cueto adds.

A boutique bank
According to Cueto, International Finance Bank is a boutique bank that provides its domestic and international clientele with specialized banking solutions and a high level of customer service. For its international clientele, he cites the nonresident alien residential lending program, which is geared to clients who want to buy a second home or commercial real estate asset in the United States.

“We do have a niche in this market, where we have a good understanding of what it is for a nonresident alien looking to invest in real estate in the United States and our ability to be able to provide financing for them,” he says.

Before coming to International Finance Bank, Cueto had roles at Brazilian, Spanish and Puerto Rican banks. He says his professional experience with different cultures is not that unusual in Miami: “A lot of the bankers here have had exposure to foreign clientele for an extended [period of] time. It’s just a matter of finding those that fit well with what you are trying to do as an organization. Everything is driven here at this bank by providing an exceptional level of customer service.”

Cueto says International Finance Bank employs seasoned bankers who understand the subtle differences in how business is conducted in the different Latin American countries and the expectations of clients from each region. “We have a team that specializes in dealing with the international clientele and all the intricacies that come with that business,” Cueto says.

“At the end of the day, the United States remains the safest place to have money in the world. That continues to be a driver.”
—Jose Cueto,
International Finance Bank

That includes having a solid understanding of the bank’s various products, as well as an international client’s expectations, and the etiquette and negotiating skills to use. “Each country has its own … way of doing business,” Cueto says. “Every client that’s international is a world unto itself. Understanding how to provide the adequate level of service and support, and how to engage dialogue and how to explain things, is a very important piece. I think understanding the cultural differences of each of those geographies is important to having success in those regions.”

Compliance concerns
Another key component—and challenge—of doing business with an international clientele is being cognizant of the regulatory risks and burdens, and “having a BSA [Bank Secrecy Act] and AML [anti-money laundering] unit that is staffed with a team that understands international account structure—what’s required to open an international account and all of the due-diligence work that goes into setting up accounts for foreigners,” says Cueto. “It’s a very complicated business.”

And it’s becoming an expensive one for banks. “The cost of BSA and AML compliance has skyrocketed over the last 10 years,” Cueto says. For example, the bank needs to staff its BSA/AML team with professionals who understand the international arena, comply with the five pillars of an effective BSA/AML program and invest in “the right technology to be able to create profiles, monitor activity, generate alerts and be able to close them. And go through the investigation process,” Cueto says.

International Finance Bank has invested in the human and technological components to comply with today’s strict regulations, whereas some banks have chosen to exit the space. Cueto believes being in the international space gives his bank a competitive advantage. “In banking, you look for diversification,” he says.

And international clients are happy to have the security of a bank looking out for their best interests. “At the end of the day, the United States remains the safest place to have money in the world,” Cueto says. “That continues to be a driver.”

Jolene Johnson is a writer in Minnesota.

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