Why Do You Need Knowledge Management System in Financial Services

By Hilee Avrahami   |   January 12, 2022
Knowledge Management System in Financial Services
Until recently, innovation and knowledge management have been separate functions in financial service organizations. In the past two years, they’ve begun to merge, with financial services knowledge management better suited than ever to deliver value to commercial and investment banks, insurance companies, credit unions, brokerage firms, wealth management advisory companies, and more.

A knowledge management system in financial services enables processes to be defined and helps connect the dots between different functions. It also allows knowledge to be delivered quickly and easily to the people who need it when they need it.

Knowledge management in the banking industry and other sectors can also boost competitiveness, ensure financial services providers are protected from financial risk while minimizing operational inefficiency and streamlining internal communications.

Benefits of Knowledge Management in Finance

Managing information in financial services is a complex endeavor. Knowledge management software helps simplify the process so businesses can operate more efficiently and meet customer needs more satisfactorily.

Along with helping banks and other financial institutions mitigate or avoid crises, here’s how knowledge management makes organizations safer and assists them in their digital transformations.

Better Decision Making

It’s a well-known fact that knowledge-driven organizations have better decision-making cultures. So it should come as no surprise that decision-making is the key to success in the financial industry. Making the right decisions lowers risks and increases the accuracy of client, customer, and organizational advice. Whether it’s fashioning loan offers, analyzing stocks, or preparing financially beneficial tax returns, sound decisions are essential.

Developing, storing, accessing, and sharing the right knowledge allows organizations to make informed decisions that drive the business forward while also complying with various local, state, federal, and international regulations. By creating a data management strategy that includes capturing both tacit and explicit knowledge, any financial services provider can ensure they have the information needed to drive the best outcome for the company and its customers.

Direct Knowledge Transfer

New employees and those transitioning to new positions require time to get up to speed. A centralized source of information ensures no one wastes time sorting through documents that might or might not be relevant to their job.

With its easy searchability and intuitive navigation, knowledge management software also facilitates swift information retrieval, helping team members quickly find answers to customers’ specific questions when they have a large number of customers to serve.

Another area where wisdom and institutional knowledge are lost is when people in senior roles leave the company. A customized knowledge management strategy prioritizes sharing of knowledge and limits the impact of inevitable churn and role shuffling on productivity and efficiency. A culture that expects everyone from the top down to share what they’ve learned and know contributes to an environment that smooths job transitions, making change management exercises easier.

Drive Operational Efficiencies

Tighter margins, faster technologies, high customer expectations, and fierce competition are just some of the challenges the banks and other financial institutions face daily. In an industry where profits are based on knowledge and speed, those who fail to deliver reliable, timely service can see their customers switch banks or institutions.

A financial knowledge management system ensures effective customer service by driving operation efficiencies, transforming customer experiences, and preventing repeated missteps. It can also guide the development of new products and services and help financial institutions improve the quality of those they already offer.

Unified Brand Experience

As more banks embrace digital solutions, they’re closing local branches at a record page. That doesn’t mean, though, that they’re cutting back on offerings for customers. As banks merge and become multinational, multi-departmental financial service entities, they need to ensure that a customer in one part of the country has the same satisfying experience as one in another location. In other words, customers expect to receive the same level of competency and access to trusted information no matter where or how they’re getting it.

An accessible knowledge management system helps organizations maintain a unified brand experience without sacrificing institutional knowledge. By making all of the company’s relevant knowledge available to everyone who needs it, customers can expect to receive the same level of knowledge and action regardless of who they talk to.

Transparent Regulatory Compliance

Consumers are often overwhelmed by the overlapping federal and state regulations that make the financial industry a maze to navigate. Rules and laws change from one year to the next, if not more frequently, and people who hope to rely on prior knowledge of “how things work” are often caught unawares when they discover new policies and procedures have been put in place.

Instead of expecting customers to bear the burden of keeping up with laws and regulations, a knowledge management system lets you place everything in a centralized base that’s easy to update and access. It also makes it much easier for all employees to stay compliant, lowering the organization’s overall legal risk. Many companies choose to have subject matter experts, like their in-house lawyers, periodically verify all regulations in the knowledge base are correct and up-to-date. That ensures transparency for agents and other users, who can easily see when the last changes were made.

Meeting Customers Where They Are

Customers entrusting their most valuable assets to financial teams want to feel secure in their choices. They’re more aware of industry news and have higher expectations and more detailed questions. They want definitive answers, and that requires financial institutions to rely on the most relevant and accurate information at their disposal.

The modern banking world is not without its challenges. Still, financial services providers can take comfort in the fact there are knowledge management software solutions available to them as a “secret weapon.” KMS Lighthouse is an AI-driven solution that helps those in the financial industry make smarter, better business decisions about the products and services they offer. It enhances every business engagement and provides accurate and consistent knowledge that helps improve customer and employee experiences alike.