A bank that is interested in offering IBF services should first submit their plans and applications to their Federal Reserve Bank in order to receive approval. Once approval has been granted, the IBF activities can begin.

The IBF is designed to foster competition amongst banks by allowing them to offer foreign customers the same services and services without the same regulations from the Federal Reserve as if they were providing services to domestic customers. This helps U.S. banks remain competitive in the global market. Banks can use their IBF to provide services such as foreign exchange operations, share dealing, and other international banking services.

IBF are used by U.S. banks primarily to attract and maintain foreign customers, taking advantage of the relative flexibility that these activities provide. IBFs have access to the same payment-processing system as other banks in the U.S., making it easier for customers to remit funds. IBFs have less stringent regulations, than domestic banks, making them attractive to foreign customers.

IBFs also have access to the same securities markets as domestic banks, offering customers a wider array of investment opportunities. These banks may also offer internet-based banking services to their foreign customers, making it easier for customers to manage their banking activities regardless of location.

However, the appeal of IBFs can also be a two-edged sword, as there are some risks associated with IBFs. For instance, the regulations applied to IBFs are often less stringent, making them more vulnerable to money laundering and other financial crimes. In addition, any losses suffered by an IBF may not be covered under FDIC insurance, leaving the IBF's customers exposed to risk.

As the global banking industry continues to develop, U.S. banks should take advantage of the opportunities provided by IBFs. By offering international banking services through IBFs, banks can remain competitive in the global market and attract more foreign customers. However, banks must be aware of the risks associated with IBFs as well, and take steps to mitigate any potential losses.