In today’s highly competitive market, modern organisations have considered knowledge as a valuable strategic asset. Organisations in the banking and insurance sectors deal with a large amount of information that requires effective management. Knowledge Management is helpful in enabling the organisation to properly manage the knowledge by facilitating the flow of knowledge among every individual. The banking institution can successfully use the knowledge to support and improve banking performance. In the modern banking sector, knowledge management has become important strategic management that can easily transfer the data and information that helps to facilitate the process of collecting, classification, revision and assembling of information in a format that is easy for an individual to use, comprehend, and share.
Knowledge management systems are hugely reliant on technological infrastructure. It is important for financial institutions to conduct training workshops on proper implementation of knowledge management. The use of knowledge management can bring competitive advantage in terms of cost where the bank can reduce the cost of activities to gain financial advantages and also it will help to attain differentiation advantage in terms of banking services provided to its customers. As Organisations like banking and insurance rely deeply on information, Knowledge Management systems make it easy for these sectors to use the right knowledge to reach the right person at the right time. Knowledge Management systems can help both the banking and insurance sectors in attaining both competitive as well as differentiation advantages.
Challenges in BFSI Sector
- Large amounts of Information – Banks, financial institutions and Insurance sectors have a huge amount of information that requires proper deployment in the areas of operations, management, accounting and marketing. These sectors need continuous improvement in order to improve customer satisfaction.
- Updating customers’ data and information – The organisation needs to update the customer details like address, bank account details, PAN card details, Aadhar card details which are a tedious task.
- Delivery of timely information to each individual – Managers are formulating strategic and tactical activities in order to achieve the best ways for transferring of information.
- Information is scattered – There are a lot of insurances like general insurance, automobile insurance, health insurance, property insurance, marine insurance, pet insurance, business insurance, etc which need a proper support process or platform where it can be stored in different file formats.
- Upskilling employees’ abilities and skills – The organisation should reinforce best practices for development of learning needs, cross-functional information sharing and training.
- Organisational Responsiveness and Flexibility – Enhancing decision making through actionable knowledge and distribution of correct information through different channels.
- High Degree of trust – the biggest challenge in the financial services sector is trust.
The vast majority of information in the insurance industry takes place through email, messenger and shared drives that create inefficiency in security and privacy issues.
Benefits for clients
Knowledge Management can benefit at both individual and organisational level. At an individual level, knowledge management can provide opportunities to employees to enhance their skills and experience by working together and sharing other people’s knowledge and thereby enhancing productivity and improving personal performance.
At organisational level, Knowledge Management can provide benefits in terms of improving organisational performance through increased efficiency, innovation and quality. It can increase the financial value of an organisation through an effective decision support system that can create more economic value for the organisation.
It helps organisations in cost reduction, increased flexibility to accept and change, reducing the time-market for the new products or services, increasing sales, reducing process cycle times, increased responsiveness to customers, improved efficiency of people and operations.
Knowledge Management tools:
- Helps the management to constantly update its customers’ data and information and Provides feedback about market situations related to services provided to customers.
- Helps in preparation of periodic reports on the state of the market and also monitoring the financial capabilities of competing banks.
- KM system increases the organisation ability to activate the appropriate security procedures for e-management.
- Builds organisational culture to improve services and helps in identifying the comparison with its services provided by the services of competing organisations.
- Creates knowledge about the customers of competing banks and insurance companies.
- Changes the routine constraints and contributes to the flexibility of work and contributes to the integration and coordination of units and divisions within the bank.
- Develops services and maximizes the benefits of the bank’s customers with innovation by bringing flexibility at work.
- One portal solution for collaboration, social share features, increases in productivity by the advanced search for documents, enhances security and also reduces cost across maintenance and support.
- A demo walkthrough for dashboard and dashlets, uploading documents, workflow capabilities and alerts.
- Provides portals for user experience platforms through Intranet, extranet, Enterprise application integration (EAI), Service-oriented architecture (SOA), social collaboration, big data portal and mobile portal.
- Helps in Enterprise content management through World-class manufacturing (WCM), Document Management (DM), Record Management (RM), Digital Asset Management (DAM), Enterprise resource planning (ERP), and Imaging solutions.
- Helps in the analytics of big data through data integration, informational delivery, data analysis, and enterprise search.
How KM brings a change in annual cost savings?
Much of the time, workers still can’t find the information needed to do their best work quickly. Information spread across email, chat, slide decks, docs, and spreadsheets are disconnected and isolated from the work that needs to be done. This often leads to data that’s inaccessible and out of date.
Knowledge Management can simplify the ability to search, retrieve, process and archive documents from anywhere in the enterprise, content services and document management solutions, can enhance employee collaboration and speed up the decision-making process.
Let’s bring those researches to use,
According to data reported by IDC, it shows that the knowledge worker spends about 2.5 hours per day searching for information.
That only means, in case you have 100 employees working in your organization, they spend 100*2.5*5 hours per week looking for the right information.
According to Payscale research, an average hourly cost of Customer Service Executive comes to approximately $14.15.
This would take the total yearly cost to the organization with 100 employees for searching the right information to USD 14.15*100*2.5*5*52, i.e, USD 919,750
A study by McKinsey states that an effective KM platform can reduce average employee time spent on information lookout by 30%.
Let’s rewrite this part as follows: If your employee spends 2.5 hours a day looking for information, then with an effective KM in place, he would spend 1.75 hours per day searching for the information he needs to get his job done!
Continuing with the same example, in the case of 100 people organization, they would spend 100*1.75 hours per day with an effective KM in place.
This would take the total yearly cost to the organization spent on information to USD 14.15*100*1.75*5*52, i.e, USD 643,825
Now, to calculate your saving you know what to do. In the example taken, the savings comes down to USD 275,925
The availability of Knowledge Management brings greater benefit in the practices of banks and insurance sectors through improving the efficiency of operating activities. It has enhanced the decision making of employees’ that includes transferring of information with an easy retrieval process. Knowledge Management has eased the organisation like banks through a process of mass communication through single omnichannel platforms that provide a seamless experience and also has raised the knowledge level of individuals which has made the workforce to meet the challenges of banking and insurance industry. Knowledge Management tools give a competitive advantage by increasing organisational performance. Knowledge-based systems have resulted in positive implications in insurance companies also as when insurance employees’ leave the workforce, the knowledge management systems capture the knowledge of internal experts and distributes it consistently that results in steady performance and efficiency. It also allows less experienced staff to operate at higher levels for more complex activities. Implementation of a good knowledge management software helps in reduction of service costs up to by 30% and adds a great value to the company.
Knowmax is knowledge management software for enterprises of all sizes and helps them deliver better customer experience. Features like decision tree software, visual guides, knowledge base, and bot knowledge empower support agents with interactive navigations to meaningful resolutions of customer queries.