Knowledge Management in Financial Services

Financial services organizations rely on knowledge management platforms to reduce financial risk, guide customers to their best options, and house sensitive information. KM strategies are also used to reduce operational inefficiency and streamline internal communications in order to gain a competitive advantage.
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Financial services industries like banking, investment, insurance, credit cards, tax preparation, accounting, and wealth management heavily rely on documentation to function. Because of that, their knowledge management strategies focus on things like version control, trust, transparency, and permissioning. In fact, knowledge management is helping to lead the digital transformation of the industry.

On the customer experience and brand relations fronts, accessing and sharing accurate information is critical to maintaining public trust and complying with regulations. A bank will often have 100+ potential offers to customers. Their advertising and implementation must comply with state and federal (and potentially international) regulations, all while being explored and sold by hundreds, if not thousands, of customer-facing employees. 

Given the particularly thorny legal and regulatory issues involved with being part of the financial services industry, proper implementation of knowledge management practices and platforms is a key business strategy.

How does knowledge management benefit the financial service industry?

Given the unique challenges of the financial services industry, appropriate knowledge sharing is a key component of business operations and compliance. All groups in the industry have to work with sensitive personal information, so document management and knowledge management processes help ensure the chain of custody is followed. Meanwhile, new business relies on many of the same operational strategies used by non-finance sales and support teams; the stakes of “getting it wrong” are just a bit higher. 

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Here are some of the unique benefits realized in financial services knowledge management:

Better decision making

The cornerstone of the financial industry is good decision making. Whether that’s analyzing the right stocks to invest in, making the best loan offer, or getting the highest refund possible on a tax return, good decisions are the key. And when everyone at a company has access to the right knowledge, they’re able to make fully informed decisions in order to drive business forward while also complying with regulations that may differ from state to state or country to country. 

It’s a fact that knowledge-driven cultures have better decision making cultures. By creating an information management strategy where both tacit and explicit knowledge is captured, any financial services operator can ensure their organization has the information needed to drive the best outcome for the company and the customer.

Straightforward knowledge transfer

New employees (as well as those promoted to new positions) will take time to get up to speed. Likewise, when some in a senior role leaves, they take a lot of institutional knowledge with them. A knowledge management strategy that prioritizes sharing of knowledge allows inevitable churn and role shuffling to have a minimal impact on operational quality. What kinds of intangible assets can a retiring executive contribute to a knowledge base that newly promoted senior managers might find invaluable? What organizational knowledge is needed to ensure a new teller doesn’t violate the law on day 10?

An expectation to share knowledge and a centralized, easily accessible knowledge base for employees at all levels can help smooth any potential transitions, and make change management exercises easier.

Unified brand experience

Gone are the days where you knew everyone at your local bank, as “local” banks are now anything but. Instead, most banks are multinational, multi-departmental financial services behemoths, which means a wider range of offerings and branch locations for customers. But a customer going into a branch in Maine and one going into a branch in Kentucky should be able to expect the same level of competency and access to trusted information. 

Widely used and accessible knowledge management systems can help maintain a unified brand experience without sacrificing institutional knowledge. In fact, by making all of the company’s relevant knowledge available to everyone who needs it, those customers can expect the same level of knowledge and action regardless of who they talk to: a teller in person, a phone rep, a chat agent, and branch manager in an entirely different location.

Transparent regulatory compliance

Overlapping state and national regulations can make the financial industry a maze to navigate as a consumer — let alone work in. And considering that those regulations can change year over year (if not even more frequently), relying on prior knowledge of “how things work” can doom individual employees and the companies they work for alike. Instead of expecting people to memorize bylaws, placing everything in a knowledge base that’s easy to update and access when necessary makes it much easier for 100% of the company to be compliant, lowering a company’s overall legal risk.

An even better option is to choose a knowledge base that allows subject matter experts (like a company’s lawyers) to periodically verify that all of the regulations in the knowledge base are correct and up to date — and for users to be able to transparently see when the last changes were made.

A doodle of various shapes representing bits of knowledgeA doodle of pointing arrows

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