Knowledge Management (KM) is nowadays an integral part of every organization's strategy and banks are no exception. New private sector banks are vastly using skilled manpower to create new delivery channels, produce innovative products, become leaders in the industry and maximize the stakeholders' value. Public sector and old private sector banks can use the KM tool to increase their productivity and compete effectively in the ever changing world.
The importance of knowledge for achieving competitive success has been recognized in the early 1990s, but it is only recently that the formal system for managing the acquisitions and the use of knowledge has begun to emerge, often created on the back of new information technology applications and systems. Banking today is more competitive and technology driven where human capital can play a pivotal role in determining the worth of the institution. The organizational structure of the banks is gradually changing and in keeping with the global trend most banks are focusing on the implementation of core banking solution where the branch's network should be downsized but the delivery system will be more dependent on technology. The rapid pace with which the changes are taking place in the banking industry is phenomenal. In order to keep pace with the changes it is essential that the Human Resource Development (HRD) in the banks develop the Knowledge Management System (KMS) within the organization so that maximum benefit accrues to the organization. From a business strategic perspective, changing customer trends, competitive products and services and changing societal and governmental pressures make the existing business models, business practices and business value propositions obsolete. Banks that can figure out the `next right thing' and prepare well in advance to ride the next wave will be more effective in the longer run. All the information, technology and database cannot assure bank's competitive advantage in the long-term unless the same are translated into actionable value propositions. Banks have to keep in mind that the only long-term competitive advantage they can have, is how effectively it manages the corporate knowledge.
It may be noted that most of the new generation private sector banks and foreign banks have created sophisticated database of clients and have been able to utilize the knowledge base of their staff member with the aid of IT, to improve the productivity to a higher level. Interestingly, talent drawn from the public sector banks is managing most of the new generation private sector banks. It is interesting to note that there is a phenomenal gap between employee productivity of the PSU banks and that of the new generation private sector banks. The strength of any bank is reflected by the collective knowledge of its employees. It is a source of sustainable competitive advantage, as the same cannot be copied by other banks. In a service organization like banks the relevance of KMS is very important as the end products are to be delivered to the client in multiple bases. |
