Global banking: what an international banker can offer Indiana importers and exporters.

• Author: Hromadka, Erik
• Position: INTERNATIONAL BUSINESS

MANAGING RISK AND generating a profit are goals that most bankers suggest for their business clients, and that advice is especially important for Indiana companies that operate in other countries.

In addition to the normal risks and rewards of business operations, international commerce presents the additional challenges of billing and collecting in foreign currencies from institutions that are thousands of miles away. Sudden changes in currency rates and simple mistakes in setting up payment systems can quickly wipe out profit margins.

Indiana bankers understand those dangers and have responded by creating a variety of services for international-banking business customers. Many commercial banks provide the ability to wire funds in both U.S. and foreign currencies and the opportunity to purchase actual foreign currency before visiting another country. However, international banking in Indiana increasingly means facilitating exports and imports.

Evansville-based Old National Bank established an international-banking department three years ago to assist the growing number of Indiana businesses working with foreign companies, especially those related to the automotive industry.

"We were seeing more and more of our clients who were importing and exporting," explains Kim Humphrey, international banking manager at Old National.

"The very first thing that we ask is 'do you have people you are working with?" she says, suggesting that a team approach is often the best way to handle international banking. For example, Humphrey stresses the advantages of using freight forwarders and government agencies when shipping products overseas.

"Do some due diligence on the company that you want to do business with," Humphrey advises. Getting referrals from other U.S. customers, a credit report and samples of products are all very helpful, she says. If possible, Humphrey suggests meeting face-to-face and building a working relationship.

Humphrey says Old National expects an increase in the number of small- and medium-sized businesses that work with foreign companies, both through joint ventures and interaction with their subsidiaries.

"It's surprising how many countries Indiana is doing business with," she adds, noting she has seen transactions with companies from Australia to Uzbekistan.

John Rudy, president of Mercantile Bank in northwest Indiana, has seen the impact of international business directly in his market. In the past year, Mercantile Bank was...