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How to create an effective knowledge management strategy

Apr 19, 2023

Financial institutions play a crucial role in our economy and are responsible for managing vast amounts of money. Given the complex nature of these organizations, consistent and accurate processing of functions is essential to ensure safe and sound operations.

However, many financial institutions still lack formal written procedures and rely on institutional knowledge to sustain operations and transfer knowledge.

The lack of formal procedures in financial institutions can create significant knowledge gaps when a long-term employee leaves or retires. Even with the best intentions, a person who is skilled at performing a task may struggle to articulate a process clearly enough to transfer knowledge. That’s why it’s important for financial institutions to develop effective procedures that can be easily understood and followed by all employees.

The right plan can help your financial institution ensure that critical knowledge is captured, maintained and effectively transferred, improving your ability to sustain safe and sound operations over the long term.

Knowledge management strategy challenges

Every function performed within an institution can be broken down into a process, and every process can be documented in the form of procedures. But developing formal procedures can be a challenge.

Institutions face the ever-changing human capital environment and the struggle to attract and retain knowledgeable employees. And as the human capital environment continues to evolve, it becomes increasingly important for financial institutions to stay ahead of the curve and develop procedures for knowledge transfer.

To address these challenges, consider identifying and prioritizing key knowledge areas.

Performing a regular knowledge audit will help you assess your current knowledge management practices and identify areas for improvement. The audit can involve tasks such as:

  • Reviewing existing procedures and documentation.
  • Interviewing employees.
  • Identifying areas where knowledge gaps exist.

For key areas, using surveys and interviews can assist with identifying high-risk functions that are essential to operations. A risk-based approach can then be used to start with the most critical areas and then move to the less critical ones.

Developing your plan

Once the key knowledge areas have been identified, you can develop a knowledge management plan.

To help ensure that your plan is effective, consider these five crucial elements:

1. How you capture knowledge

Planning involves determining the method for capturing knowledge, which can be done using written documentation, interviews, videos or other methods.

Third-party consultants can assist if your financial institution doesn’t have the internal expertise or resources to obtain this information.

External consultants or industry associations can help gain insights into best practices for knowledge management. These partners can provide guidance on how to develop procedures, capture knowledge and transfer knowledge within the organization.

2. How you document operational knowledge

Your institution should also develop a plan to document operational knowledge. This involves determining the method that works best for your institution and employees.

Traditionally, written procedures have been used, but technology now provides other mediums that appeal to the current generation of employees. Once a method is determined, a standardized format should be considered to improve ease of use.

3. How you transfer knowledge

Plan for transferring knowledge by outlining methods, such as mentoring, cross-training and job shadowing. A combination of these methods can be used to help ensure an effective knowledge transfer.

It’s also important to evaluate your workplace culture. Creating a culture of learning can encourage employees to share knowledge and expertise. This can be done by recognizing and rewarding employees who contribute to the knowledge management process and by providing opportunities for employees to collaborate and learn from one another.

4. How you maintain your plan

It’s important to assign responsibility for creating and maintaining the knowledge plan. This could be a single person overseeing the entire universe of knowledge or multiple people overseeing departments or functions.

A timeline should be developed for working through the areas to be covered, and consideration should be given to how procedures will be updated over time to remain current.

5. How you can leverage technology

Leveraging technology can streamline the knowledge management processes.

For example, you can use tools such as knowledge bases, wikis and collaborative workspaces to capture, organize and share knowledge. Artificial intelligence can also be used to automate some of the knowledge management processes, such as identifying knowledge gaps and suggesting content for the knowledge base.

How Wipfli can help

Wipfli’s continuous improvement services can help ensure your financial institution never stops growing. Our consultants offer guidance on lean strategies that can reduce costs and increase net income. Contact us today for more on how we can help you transform your operations.

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Danielle M. Heidemann, CIA
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