 Aloha and welcome to Business in Hawaii with Reg Baker. We are a weekly show that broadcasts from the Think Tech studios in downtown Hololulu in the Pioneer Plaza. We air every Thursday from 2 to 230. We talk about success stories in Hawaii of businesses and individuals and organizations that help support the success of businesses. As we've all heard, there are challenges in Hawaii, but there are companies and individuals that have made it work. And we highlight those individuals on this show. Today we have one of the older financial institutions in Hawaii. It's the Bank of Hawaii. Over a hundred years old, Kevin Sakamoto is one of the senior executives at the bank, and I believe has responsibility for the branches. So Kevin, welcome to the show. Thanks so much, Reg. And that is your responsibility at the bank, right? My responsibility is the strategy for all of our branches, our 69 branches throughout the state and the West Pacific. Alright. And it's interesting, and I'm not going to dwell on this, but I worked at the bank many years ago, probably 25 years ago, and it's much different today than it was back then. And hopefully maybe the second part of the show we can touch on that a little bit. Yeah, let's do that. Let's do that. But first, let's talk a little bit about you. Okay. Now you've been in Hawaii all your life? I've been in Hawaii all my life, born and raised, went to school on the east side at Kaiser High School, so a public school boy, very proud of that, stayed home, went to the University of Hawaii where I got a degree in finance. Well, my oldest son went to Kaiser. Alright. So he played the football team. He was called Reggie Baker, the touchdown maker. Oh, nice. Yeah, he did really well over there. It's a great school. And so then you went to the University of Hawaii? I did. And the whole time? I did not. I did not. I stayed here and got my degree in finance, like I said earlier, and yeah. Alright. And then what, went right into banking right after school? Yeah, so the story is that after I graduated from the University of Hawaii, all my buddies were off to Vegas to blow off a lot of steam. And a week after graduation, I'm sitting in orientation at the Bank of Hawaii, starting there as a management trainee. So you had that career focus right from the get-go? I did. Like it or not, away we go, and I'm still here today. Very good. And so orientation was that, how did you get a position at the Bank of Hawaii? How did that work for you? Yeah, so part of the story is I come from a generation of bankers, a generation, my father, 40 years at Brand X across the street. Uh-huh, those guys. Those guys. And you know, I thought he had such a great career. He'd be home at four o'clock, he'd be at all the sporting events for myself and my brother, and I thought, you know, this guy's got a good job. And lo and behold, it's not like that today, Rich. That's old school banking. Old school, yeah. Old school, yeah. But now, you know, you're right, it's a lot different. You know, I was at the bank in the international division, and it was six days a week, and we would open in New York, and we'd stay open until Japan. Wow. And so it was a 20-hour day, and we had people there all the time. Did that for a number of years. Then I went and we, in the bank, I bought Hawaiian Trust. That's right. And I helped integrate Hawaiian Trust into the bank. Yeah. Hawaiian Trust was old school banking. Yeah, yeah. And it was a big cultural change. It isn't like that anymore today. Yes, yes. So you probably work half days. What, 12 hours a day? 12 hours, that's what I call it. I call it half days. Yeah. Yeah. So you joined the bank, and then how did it work as far as your career? I mean, you've obviously done very well. I mean, you've got to be one of the top guys over there now. But, you know, was it a direct line? Did you go through different departments? Yeah. And how did you get your banking? Good question. I get asked that a lot. So starting as a management trainee, you go through about a two-year program, and you go through credit training, formal, like school training. So just when I thought I got out of school, I'm back in the classroom. You never stopped learning these days. But I did a lot of different rotations I did. Aloha. I did banking, what I'm doing today, but I did commercial banking, and I did some administrative work. But I took different positions. So although I've been at the bank for about nearly 24 years, I've probably had seven or eight different jobs within that career. But that's a great way to learn the business, right? Yeah, it sure is. Sure is. And there's a lot of... Banking is not just taking money and maybe making some loans. No. There's a lot of moving parts to it. No. But that's a common question we get asked. People ask you, you work at the bank for which branch you work at. But two-thirds of our employees are actually not in the branches. I was just going to ask that. I guess the majority, as you just said, are actually not in the branch. Right. Back there doing all those other things at banks. Yes, all the other things. All the other things. As you alluded to and wanted to talk more about, banking is changing. Aloha. We have a lot more investment in digital and our ATM network. And customers just want to bank differently these days. And we've got to continue to invest in that and provide those services. Right. And so as you... And I want to get into that. And there's a lot that we can talk about. But getting back to the career aspects, we do have a lot of students that watch this and people that are going through the educational system. And so you started yours. You worked there for 24 years. You had a lot of different... But if somebody was interested in getting into the banking career, what would be your advice to them? How would they do that? Good. We have a lot of different opportunities to get into banking, whether it be Bank of Hawaii or the other banks here, through the internship program, where you get a lot of good exposure. A plug for the Bank of Hawaii internship program is we give the interns great exposure to a lot of things. They're not filing paper or doing groundwork. We give them real-life work, so they really get a flavor of the job. There's that and there's a management training program. So fast forward from when I started, the program's been around for 50-plus years and a great way to get into the bank. Well, you've actually had some CEOs started with this. Absolutely. I remember when I was there, Larry Johnson was one of those. He was a trainee. He was a teller for a company at the time. He was. So he did very well for himself. He did. So does the bank recruit at the universities? We do. We were at a lot of the career fairs. We're involved with a lot of the organizations. We host days at the bank where we take the group around to different areas. And we have presenters come through and talk about the different areas of the bank. So we're really engaged with the universities. We're really involved. Well, it's a constant need to be finding good people. Absolutely. You've got a bunch of people working for you and you need to keep bringing in the new guys in order to keep growing the bank and replacing the ones that are retiring. That's right. That's right. With the never-ending process. It is. We have 2,100-plus employees. Wow. And you're right. It's finding good people and it's keeping good people and it's getting our good people to tell others so we get more good people. Well, in full disclosure, I have a son that works at the Bank of Hawaii and it was very kind of you to make some introductions for that. So that was great. No, thank you. Robertson really well for us. Yeah. And I tell him how important it is to continue to do well because he's representing me, too. That's right. That's right. So family name is important. Family name, absolutely. All right. So I guess the bank has a lot of different type of training programs. So once you're there, even, you know, when you're not new, as you go through the banking career and you have to get different types of skills, the bank is really big on training. We are. We have a program called our Pathways to Professional Excellence and different employees are sponsored in there by their managers and what they go through about six months of formal classroom training on things like people scales, emotional intelligence, presentation skills. They work on group projects as a cohort. And they also go on different rotations throughout the bank to just get greater exposure. Well, and that really builds the cohesiveness within the team. You know, and that's a great program. It does. Although we're 2,100 employees, we want to perform like we're 5,000 employees. So it's a teamwork that does that. Right. That's great. And now I said you were, the Bank of Hawaii has been around for 100 years, but it's actually been 120 years. 120 years. Very good. So well before statehood. Yes. Yes. That's very good. So as far as, you know, a career track for somebody, you know, being a banker means a lot of different things. It does. You know, and you've got operational, you've got investment, you've got all kinds. I mean, there's got to be multiple tracks at a personal level. Multiple tracks and a track that, like your son, Robert's on, on the technology side is a growing area of need for the Bank of Hawaii and for a lot of companies in general. I would venture out to say all companies are technology companies because that's a big part of their business. So that's an important track. We're growing a lot in our data area and turning data to information to knowledge. Big data. Big data. That's a big area for us too to capture that information. I think I heard a statistic one time that said that the amount of data that's processed doubles every few years or something. It's just huge. It's something mind-blowing. And we're not taking advantage of all that information. We haven't quite figured out. I think some industries have gotten better at it than others, but there's a lot of useful information out there that we're just not quite tapping into. That's right. So hence the need for us to develop those areas and really find those nuggets of gold. Yeah. And again, as we mentioned, this is an evolutionary thing. Banking changes. Banking changes. And a lot of people don't realize it, but it is an industry that goes through cycles of regulation. And you've got to have people to stay on top of that. We do. We do. Our compliance department, our audit department is quite large and keeps us out of trouble, keeps us in good graces, keeps making sure we're doing the right things all the time. Well, that keeps the regulators kind of away. Absolutely. You don't want them in the house if you don't need them. They're going to be on their van side. That's right. Yeah. But one important aspect that I think a lot of people seem to at least not appreciate as much as maybe they should is, but the money that goes into the bank generally is not the bank's money. That's right. It's usually the community's money. It's the people's money. The community's money. Well, we steward the money. We care for the money. We keep it secure. We have to be judicious when we lend out that money to make sure that we get repaid so we keep our depositors whole. So yeah. When I'm sitting on the desk with a client as, you know, a CPA, I'm helping the client try to find some sources of funds and they get grumpy and they say, well, the bank's not approved on my loan and they're not doing it well. They have to be prudent. Absolutely. They have to be careful because it's not their money that they're playing with. That's right. It's other people's money and they've got to be protective of that. That's right. So I think people need to just appreciate that a little bit more. Yeah. Thanks, Rich. Yeah. So the bank is going through some evolutionary changes. I guess the whole industry is going to matter. We are. We are. So you talked about you started with the bank 25 years ago. Yeah. Lots of changes then. I would imagine. So it's about the same tenure that I've been at the bank and when I started we had so much equipment in the branches to process checks, to file paper and we just don't need that anymore and we're digitizing a lot of the things that we do. Things are going to the mobile phone and online. So the business of banking is just changing and faster clipped in ever before. Do you see it becoming more efficient? Yeah. Definitely. Quicker processing of transactions. Quicker, hopefully loan responses and be able to get capital into the hands of businesses or individuals. Right. I guess a lot of what drives this changing technology is not the technology itself, but also the demographics of customers and what they look for and what they want. Do we have a pretty sophisticated customer base out here that wants that technology? Yeah. There's kind of two schools of thought on that. To one point, yes. The customer preferences and demand drive a lot of that. But there's also the innovation that needs to come on the banks part to be able to offer up these services that customers don't even know that they would need and once they find out about it, really like it. Then they can't live without it. That's right. We have reached a breaking point. We just need to go on a short break. I'd like to come back and talk a little bit more about maybe the breakdown in the demographics of the customer base. Who wants the technology and who wants the human touch? Sure. We'll do that in just a minute. Sounds good. This is Business in Hawaii with Reg Baker. I'm here with the bank of Hawaii, Kevin Sakamoto, talking about the bank and how it's evolved over the years. We're going to go on a one-minute break. We'll be right back. Hi, I'm Chris Leetham with The Economy and You, and I'd like to invite you each week to come watch my show each Wednesday at 3 p.m. Live. Aloha. I'm Richard Emory. I'm with co-host Jane Sugimura of Kondo Insider, Hawaii's weekly show about association living. The purpose of these videos is to educate board members and Kondo residents about issues relating to association living. We hope they're helpful and that they assist in resolving problems that affect the relationship between boards and their residents. Each week, Thursday at 3 p.m., we bring you exciting guests, industry experts, who for free will share their advice about how to make your association a better place to live and answer a lot of very interesting questions. Aloha. We hope you'll tune in. Aloha. And welcome back to Business in Hawaii with Reg Baker. Today, talking with Kevin Sakamoto, the Bank of Hawaii, and we're talking a little bit about the innovation that the bank has gone through recently with technology. I guess, you know, we've got a customer base that maybe has two components to it. One that's real comfortable with it, and one of it that's kind of like that, that human touch a little bit. I mean, how does the bank deal with that? Yeah, it's tough. You know, we want to make sure that we have services and channels that deliver those services that can fulfill the needs of all customers. So we're talking during the break about the millennials and their love for technology, and we're putting a lot of dollars and investments in our mobile banking, online banking. What we recently introduced is a way to take out money with your mobile phone and not needing a debit card. Back in the old days, that would give me the cold sweats. I can see that. I can see that. And we have the more mature demographic, the baby boomers that like to do things old-fashioned way. We want to do that, too, and take care of them when they come into our branches. So we want to offer it all. And that's good. And, you know, the bank should be applauded for trying to do all of that. But it's not always the most efficient, you know. Sometimes you've got to have the staff to do that. You know, I have a son. I think my two younger sons don't go to the bank very often. I think my one son lives in San Francisco, works in San Francisco. It's the headquarters for Uber and Facebook and all that. Everything is done through technology. Yeah. You know, I don't think he's ever been in a bank, you know. I, on the other hand, I like when I have my paycheck or I've got some money and I'm giving it to somebody, I want to see who it is that I'm giving it to. And we have clients just like you and just like your son in San Francisco. And a phenomenon that we've seen a lot with the demographic is that in the younger generation, the millennials, the objective there is really to teach them about banking. And on the baby boomers, it's really to teach them how to bank more efficiently and digitally to make their lives easier so they can, you know, spend time with doing things that they love to do, like spend time with their grandkids or their hobbies. You know, and as we talked a little bit earlier, the evolution of finances in general, the financial industry and financial transactions and all the different options that are available, it's hard for any layperson, if not impossible, to know all the different options. You've got to go to the professionals where that's their business to help find that product mix that works best for them. And we've got people to do that. We've got people to do that. And we were talking earlier that we just reopened the branch in Pro City, which is our first branch of the future. We call it the branch of tomorrow, which has more space available to engage with customers so we can do the things that you mentioned, teaching people how to bank more efficiently, giving them more space so we can spend some one-on-one time and help them with all their needs. So that's really the whole crux of what we're trying to do with the new branch. It sounds almost like a learning center that they can go in there and learn about all these different options that they have. It does. You know, I guess, you know, I mean, Apple does that, Microsoft does that, you know, banks do that. You know, it's, and it changes. I know they keep launching new services all the time. All the time, always moving forward. So how has that branch in Pro City worked out? Did you get a lot of interest in that? Yeah, you know, so far so good. The customers love the look and feel of it. What we tried to do is spend a lot of time, effort in terms of making sure it feels local, that it's just not cold and technology-driven. Don't get me wrong, we have upgraded technology, but we have a lot of decor and branding elements that are of Hawaii because we really want the community to feel like that branch is theirs. Yeah, well, that makes it convenient. It makes them comfortable going into it. Because I think sometimes, you know, the downtown branch can be intimidating. You walk into those big double doors and you see all these people running around. I mean, where do you stand in line? I see some of these machines over here and over here. You know, it's nice to have somebody greet you at the door and say, hey, how can I help you? You know, just shake your hand and sit down with you. You know, it's nice. You don't get that very much these days. You know, and a startling statistic of a survey that I recently saw is that the millennials rather go to the dentist than go to the bank. Oh, no. Oh, my God. Nothing against dentists. Nothing against dentists. They're good clients. They're good clients. Absolutely. Yeah, but no, that's an interesting analogy. I had not heard that. You know, but I guess being a banker, I don't find it so distasteful. But my gosh, somebody who's taking care of my money, I want to be there and get to know these guys. Absolutely. Which is the big boomer way of going in and knowing the teller and having them know you and you have that relationship. Yeah. And I know back in the old days, the branches actually would house almost like all the, they could make loans and they can do a lot of different things. But, you know, we've kind of tweaked that a little bit these days and we've got more of a centralized type of location that makes things a little bit more efficient and productive. It does. It makes it more efficient. And as we had the discussion earlier about regulation, it just makes things more consistent and making sure that we have fair lending practices applied across the board and something that's very important to us and to the community. Well, and people look at that real closely. So you've got to be sure you document that whole process. You know, the bank, you know, of course, there's a lot of consumers, individuals, they come in and do banking and then they take out the mortgages and they do the home equity lines and all that. But you also have a big component, a big part of the bank is business focus too, right? And small businesses, of course, are always looking for products and services. What does the bank have in those areas that support small business? You know, we're so proud of how we support the small business. The Bank of Hawaii has been working hand in hand with the SBA, the Small Business Administration, for a number of years. In fact, we were named lender of the year, eight out of the last 10 years. So we're really proud about that designation because what that demonstrates is our commitment to help small businesses with capital. And funding to get started or expand their business. With our 69 branches, all of our managers there are well equipped to help businesses. We help them with their business plans and understand what keeps them up at night and help them prepare for the what-ifs. You know, and it's important to have that second set of eyes looking at things too, you know, because sometimes naturally small businesses are going to be a little optimistic. They're going to go into business and they're going to become rich within six months, you know. And hopefully it works for them, but sometimes it doesn't. It's nice to have a second set of eyes looking at this and bring them back a little bit more to what's realistic. Yeah, you know, we'd like to think of ourselves as a partner with the business as one of their key advisors and being able to share good news, but also being able to make sure that they check the what-ifs. Yeah, and there's a lot of what-ifs and they don't ever stop. I mean, small business is very dynamic. It changes all the time. And again, having that connection with the banker really helps because there's going to be challenges along their way, little bumps here and there, maybe even some opportunities and having somebody to talk to to help guide to what the best solution is is something the bank can help with. Yeah, and other things that we help with in the small business arena is we put on a series of seminars called our smart money seminars. We've done some on cybersecurity to protect themselves from, you know, all the hackers out there trying to get out their proprietary information. We've done seminars for those that are looking like, should I continue to pay rent or maybe I should buy a place. So how do we figure out what works best so we go through those scenarios? So we try to put on things that are really educational and can help the businesses. Right, and sometimes you bring in other organizations to help with that process, too, right? We do. You kind of host them in your branch. We do. We have a resource days with the small business administration. We have experts on site to help businesses with their planning or financing or whatever maybe. Yeah, there's, I guess, how would somebody find out, for example, if we were on Kauai or Maui or even out in Pearl Ridge, how would somebody find out where these courses and classes and days are going to be done? Good question. You know, we're going to shortly get the schedule up online on our website on www.boh.com but we also post flyers and posters in the branches to create some awareness of when we're having it and it's usually very well attended. So it's usually a good idea to just stop by the branch once in a while and see what's going on. Yes, absolutely. That's good. And then I know, because I go to the branch a lot, I mean sometimes you even have specials. You know, there's specials that you can do on mortgages, on loans, on opening accounts and stuff like this. So there's a lot of activities going on. And our bankers are very good at taking the time to ask the right questions, to make sure we understand the needs of our customers to be able to make recommendations that really suit what they're looking to do. You know, and there's also another piece that, because I was in the international side, I helped people with their documentary collections and importing and exporting type activities and things like that. Does the bank still have something like that available to people? We do. We have an international department that still does that. We have quite a number of businesses that deal internationally. And we want to make sure that their dealings and all that is very safe and secure. Oh, yeah. So, yeah. Yeah. If you think there's scammers out here trying to get your money, once you get into that international arena where the regulatory environment maybe not as strong, you know, you've got to be even more vigilant to make sure you don't deal with the wrong people. Totally agree with you. And the bank can actually, you know, maybe not protect you, but can help guide you along the way. Yeah. Yeah, that's very good. Now, where does the bank? You said you've got 69 branches. 69. All right. And some of them are not in Hawaii. Yeah. So where are the ones that are not in Hawaii? So we have a couple of locations in Guam. We have a branch in Saipan and Palau and also in American Samoa. All right. Yes. American Samoa. I used to go there all the time. Yeah. It was a fun place to go because they needed so much help. And as a CPI, I worked with the branch after I left to help put together loan packages. Yeah. It was a lot of fun, but it was tough duty. Tough duty. Tough duty. But for people who are in Hawaii that maybe want to have another source of their product, not exactly an export in a sense, but they can also send some of this to Guam and to Saipan and some other places and there's facilities there that help them do that. Absolutely. We have relationships there. We have relationship officers there that have the relationships with the local merchants and business leaders, community leaders. Oh, the Chamber of Commerce. The Chamber of Commerce that you're very familiar with. Yeah. Absolutely. Leverage our network. Absolutely. That's just another reason to have that relationship with the bank to help facilitate this. Now, most small businesses, as I'm sure you know, generally one of their challenges are going to be access to capital and there's sources that they can go to get some of this, but if they get to the point where they might be looking at maybe getting some bank financing, whether it be an equipment lease or a building, you know, build out or something, who do they talk to? Did they go to the branch and talk to somebody? Can you walk us just through that little bit? Yeah, sure, sure. I mean, they can walk into any one of our 69 branches, meet with our bankers there. It doesn't have to be the manager, but it could be and we'll walk through the process of putting together the loan package and asking for the financial statements to support that and really try and hold our customers through that process. It's probably a good idea that before a company gets to that point they've got some track record. You know, a few years maybe of tax returns and financials, you know, something that shows the ability to repay. That'll help the process. You know, and the absolute of that is the business plan and where you're putting out some projections and the justification based on the projections, based on your market research and knowledge for your business, it's important too and we can help with that as well. That's right. So there's so many different positive reasons to have that relationship with the bank. So, you know, everybody needs to go down and start working on that. They do. They do. Very good. Thank you for the show. Thank you. But maybe, you know, down the road a little bit. Maybe we can regroup again and talk a little bit more about how the branch of the future is evolving. Love to. It'll be fun. All right. Well, thank you. Thank you. This is Business in Hawaii with Reg Baker. We broadcast live every Thursday from 2 to 2.30 in the downtown studios of Think Tech Hawaii. Until next week, aloha.