Bank of Hawaii Corporation (BOH): Business Model Canvas

Introduction

As the world evolves into the digital age, financial institutions have had to adapt their business models to stay relevant and competitive. The banking industry has seen a steady growth rate with the global assets of the top 1000 banks reaching $124 trillion in 2021, an increase of 8.8% from the previous year. In the United States, the total assets of commercial banks have surpassed the $20 trillion mark, indicating a healthy and growing industry.

With such a competitive landscape, it is crucial for banks to have a clear and concise business model that sets them apart from their competitors. One bank that has achieved this is Bank of Hawaii Corporation (BOH). A regional bank operating in Hawaii and the Pacific Islands, BOH has a customer-centric business model that centers around risk management, operational excellence, and growth through organic expansion and strategic partnerships.

But how does this business model translate into actual revenue streams and cost structures? Let's take a closer look at BOH's key revenue streams, cost structure, and important partners in order to understand their success in this dynamic industry.

Key Partnerships

As a leading financial institution, Bank of Hawaii Corporation recognizes the importance of strategic partnerships to deliver top-notch services to its clients. The following are the key partnerships that BOH has established:

• Technology partners: BOH partners with leading technology partners such as Fiserv, IBM, and Microsoft to ensure that its online and mobile banking systems are robust and secure.
• Merchant partners: BOH has partnered with several merchants in the retail, hospitality, and healthcare sectors to enable clients to make purchases and payments with their BOH credit and debit cards.
• Financial partners: BOH partners with other financial institutions, including credit unions and investment firms, to enhance its products and services and to provide clients with access to a broader range of financial products.
• Insurance partners: To provide comprehensive solutions to clients, BOH has partnerships with insurance companies to offer risk management and insurance products such as life, homeowner, and automobile insurance.

These key partnerships have enabled BOH to deliver world-class services to its customers and expand its offerings beyond traditional banking services, creating a holistic financial services environment. BOH continually seeks new and strategic partners to innovate and enhance its services.

Key Activities

Bank of Hawaii Corporation is a financial services company that engages in banking, investment management, and insurance services. The following are the key activities that BOH performs to offer its core value proposition to its customers:

• Deposits: BOH accepts deposits from individuals and businesses, which are used to fund its lending operation. Deposits are the primary source of funds for the bank.
• Lending: BOH provides various types of credit to its customers, including personal loans, home loans, and business loans. To manage its credit risk, BOH conducts credit analysis and evaluation of loan applications.
• Investment Management: BOH offers investment advisory services to individuals and institutions by managing their assets to achieve investment objectives. BOH employs a team of investment professionals who provide investment advice, execute trades, and monitor investments.
• Corporate Banking: BOH offers various banking services to its corporate clients, including lending, treasury management, and international banking services. BOH caters to the needs of corporate clients by providing them with customized solutions.
• Wealth Management: BOH offers wealth management services to high net worth individuals, providing them with financial planning, investment management, and fiduciary services.
• Insurance: BOH's subsidiary, Bank of Hawaii Insurance Services, offers various types of insurance solutions, including commercial property and casualty insurance, personal insurance, and employee benefits.
• Online and Mobile Banking: BOH offers online and mobile banking services to its customers, enabling them to access their accounts, make payments, and transfer funds.
• Customer Service: BOH places a high emphasis on customer service, offering personalized support to its customers through its branches, call center, and online channels.

Key Resources

Bank of Hawaii Corporation (BOH) is a banking and financial services company that relies on various key resources to create and deliver value to its customers. These resources include:

• Human resources: BOH values its employees and invests in their training and development to ensure they have the necessary skills and knowledge to provide excellent customer service. The bank's workforce includes tellers, loan officers, financial advisors, and other professionals.
• Technology: BOH leverages technology to simplify banking processes and enhance customer experience. The bank's digital banking platform enables customers to access their accounts, pay bills, transfer funds, and manage their finances from any location.
• Physical resources: BOH has a network of branches and ATMs across Hawaii, which enables customers to access their accounts and conduct transactions conveniently. The bank's branches are equipped with advanced banking technology, such as cash recyclers, to streamline transactions.
• Financial resources: BOH has a strong financial position and access to capital, which enables the bank to lend to individuals and businesses in Hawaii. The bank's diverse portfolio of loans includes consumer loans, mortgage loans, and commercial loans.
• Partnerships: BOH has partnerships with other financial institutions, such as Visa and MasterCard, which enable the bank to offer credit and debit cards to its customers. The bank also collaborates with other businesses to offer value-add services, such as travel rewards and discounts.

Overall, BOH's key resources enable the bank to deliver exceptional customer service and meet the diverse banking needs of individuals and businesses in Hawaii.

Value Propositions

Bank of Hawaii Corporation aims to provide exceptional value propositions to its customers. Through its wide range of financial products and services, BOH promises to meet the ever-changing needs of individuals, businesses, and communities.

• Convenience: BOH believes in providing unparalleled convenience to its customers. With its robust online and mobile banking services, customers can easily access their accounts from anywhere, at any time. With the help of its extensive ATM network, BOH ensures convenient cash access even when one is on the go.
• Personalized Services: BOH understands that every customer has unique financial needs. That's why it promises to provide personalized services that cater to individual needs. With a team of expert advisors, BOH provides customized financial solutions that help customers achieve their financial goals efficiently.
• Competitive Rates: BOH believes in providing great value to its customers. With its competitive rates on deposit accounts, loans, and other financial products, BOH ensures that customers get the most bang for their buck.
• Community Engagement: BOH is a community bank that believes in giving back. By supporting various community initiatives and non-profit organizations, BOH is committed to making a positive impact on the communities it serves.
• Security: BOH understands the importance of financial security. That's why it ensures that its online and mobile banking services are highly secure, protecting the customers' sensitive financial information from cyber threats.

By focusing on the above value propositions, BOH aims to establish itself as a top financial institution in Hawaii, providing exceptional financial services to its customers while making a positive impact on the communities it serves.

Customer Relationships

At Bank of Hawaii Corporation (BOH), we strive to build strong and lasting relationships with our customers by providing personalized services that cater to their financial needs. We understand that building trust is key, and we prioritize transparency in our interactions with our customers. Personalization: We believe that every customer has unique financial needs, and we strive to provide tailored solutions to address those needs. Our relationship managers work closely with our customers to understand their financial goals and provide guidance on how to achieve them. Transparency: We believe that trust is the foundation of a strong relationship. We are committed to being open and honest with our customers about our products, fees, and policies. We also make it a priority to educate our customers on the products and services we offer, to help them make informed decisions. Continuous engagement: We proactively engage with our customers to ensure that we continue to meet their evolving financial needs. We regularly provide updates on new products and services that may be of interest and connect our customers with relevant resources to help them manage their finances. Omnichannel support: We recognize that our customers have different preferences when it comes to receiving and managing their financial information. That’s why we offer support across various channels, including in-person, online, and mobile banking. Our goal is to ensure that our customers can access their account information and support whenever and wherever they need it. Overall, our approach to customer relationships is centered around understanding our customers' needs and providing personalized and transparent support to help them achieve their financial goals.

Channels

The channels through which Bank of Hawaii Corporation (BOH) provides its services to customers include both physical and digital channels. Physical Channels:

• Branches: BOH has more than 60 branches located throughout Hawaii, where customers can access a wide range of banking services.
• ATMs: BOH has over 400 ATMs spread throughout Hawaii, Guam, Saipan, and Palau where customers can withdraw cash and check balances.
• Call Center: Customers can call BOH's toll-free number to get help with their banking needs, including opening accounts and resolving issues.

Digital Channels:

• Online Banking: BOH's online banking platform allows customers to access their accounts, transfer funds, pay bills, and manage their finances from their computer or mobile device.
• Mobile Banking: BOH's mobile app allows customers to access their account information, check balances, transfer funds, deposit checks, and pay bills from their mobile device.
• Social Media: BOH uses social media platforms like Facebook, Twitter, and LinkedIn to engage with customers and share information about their products and services.

BOH's multi-channel approach ensures that customers can interact with the bank through their preferred channels, making it easier for them to manage their finances.

Customer Segments

Bank of Hawaii Corporation (BOH) serves a wide range of customer segments with various banking needs. The following are the primary customer segments that BOH caters to:

• Personal Banking Customers: BOH offers a range of personal banking products and services to individuals, including savings accounts, checking accounts, consumer loans, home mortgages, and credit cards.
• Business Banking Customers: BOH provides an array of banking products and services to small and medium businesses, including business loans, lines of credit, commercial real estate loans, business checking accounts, and merchant services.
• Wealth Management Customers: BOH provides wealth and investment management services to high net worth individuals, families, and businesses. These services include investment planning, retirement planning, trust and estate planning, and private banking.
• Government and Institutional Banking: BOH provides banking services to government institutions, nonprofits, and educational institutions. These services include cash management, online banking, merchant services, and lending solutions.

BOH also provides specialized services to customers who require unique financial solutions, including foreign banking, insurance, and international banking services.

Cost Structure

Bank of Hawaii Corporation (BOH) operates on a cost structure that is designed to maximize profitability while maintaining competitive pricing for customers. The largest expenses for the bank are personnel and technology.

• Personnel: Employee salaries, benefits, and bonuses make up a significant portion of the bank's costs. BOH invests in its workforce by providing ongoing training and development opportunities, which helps to ensure that employees can provide the best possible service to customers.
• Technology: BOH has made significant investments in technology to improve its efficiency and provide better service to customers. The bank's online and mobile banking platforms, for example, are designed to make it easy for customers to manage their accounts and access information.
• Infrastructure: The bank also incurs costs related to maintaining its physical infrastructure, including branches and ATMs.
• Marketing and advertising: BOH invests in marketing and advertising campaigns to attract and retain customers.
• Regulatory compliance: As a financial institution, BOH incurs significant costs related to complying with federal and state regulations.
• Risk management: The bank also invests in risk management practices to protect itself and its customers from potential losses.

By carefully managing costs, Bank of Hawaii Corporation can continue to provide excellent service to its customers while maintaining its profitability and staying competitive in the marketplace.

Revenue Streams

The Bank of Hawaii Corporation generates revenue primarily from its banking services, which are segmented into four main categories:

• Consumer Banking: BOH generates revenue from its consumer banking services, including personal checking and savings accounts, loans and mortgages, credit cards, and wealth management services for individual customers.
• Commercial Banking: BOH offers a range of commercial banking services to businesses, including business checking and savings accounts, loans and lines of credit, cash management services, and trade finance solutions.
• Investment and Wealth Management: BOH provides investment and wealth management services to high net worth clients, including asset management, trust and estate planning, and other investment advisory services.
• Other Revenue Sources: BOH also generates revenue from other sources, including fees and commissions from insurance and brokerage services, foreign exchange services, and treasury and capital markets services.

In addition to its core banking services, BOH also generates revenue from other sources, including:

• Net Interest Income: BOH earns revenue from the interest charged on loans and the interest earned on deposits.
• Non-Interest Income: BOH earns revenue from fees and commissions charged for certain services, such as overdraft protection, processing credit card payments, and late fees on loans.
• Merchant Services: BOH provides merchant services to businesses, charging fees for processing credit card and other electronic payments.

Overall, the Bank of Hawaii Corporation's revenue streams are primarily driven by its core banking services, with additional revenue generated from interest and non-interest income, as well as fees and commissions from other services such as merchant services and investment and wealth management.

Conclusion

In conclusion, the Business Model Canvas for the Bank of Hawaii Corporation (BOH) has been successfully created, identifying key aspects of the bank's operations, target customers and revenue streams.

The canvas revealed that BOH has a very strong emphasis on customer relationships and is dedicated to providing excellent customer service. The bank is focused on providing loans, mortgages and other credit products, but it also has diversified revenue streams through its investment and insurance services.

Furthermore, BOH has a well-established presence in Hawaii and is looking to expand its reach to other Pacific Island countries with similar demographics and markets, with a particular focus on tourism and other service-oriented industries.

• Overall, the Business Model Canvas for BOH provides a clear understanding of the bank's strategy, target customers, and revenue streams, setting a solid foundation for future growth and opportunity.
• The canvas can also be used as a framework for innovation and strategic planning, enabling BOH to continually adapt and evolve to meet the changing needs of its customers and market.