Transforming Banking
March 3rd, 2010
Bank that manages the money with greatest level of collective smartness can make more money for them as well as to their customers. The success of any bank depends only on how well the collective knowledge is created and leveraged. In an interview with The-Week (May 22, 2005) Rana Kapoor, MD of Yes Bank has said, “Banks are not really bringing knowledge to the table. Banks need to look at industries that are building and have built global competitive advantage, create domain knowledge and use that to create superior mind space for customers to get a grater share of the business pie”.
In some countries, there is a complete change in banking due to deregulation that brings more players and more choices to the customers. Only speed, quality of customer service, differentiation and unique way of making money can bring more customers. Banks must develop competency through unlearning and learning to compete in this new environment. If banks do not address the competency gap for delivering banking excellence, they will be left out.
How to Transform?
As per Kogut (2000), ““Banking management is trying with the utmost capacity to capture, manage and construct suitable information into its organizational knowledge to improve the quality of its operations. Eventually, this will enhance the rules of modern banking institutions in the economy”.
The solution for addressing all these challenges is empowering the bank through right people, process and technology based systems. In this regard, we would like to suggest the following six smart steps to make knowledge an integral part of banking.
1. Organize all the knowledge related to banking processes, guidelines, products, customers, portfolios, opportunities, investment strategy & risks and ultimately make it available to right people in a secured way.
- Provide easy access to banking standards, regulatory and legal details of all countries.
- Information audit trail to keep track of dissemination of changes for getting up-to-date & timely information.
- Manage circulars through smart, fool-proof & knowledge base driven communication model to ensure that all the employees are very well informed on all activities and changes.
2. Interact to harness the collective knowledge related to managing portfolios, mitigating risks, solving issues and ultimately to taking the right decision towards highest ROI possible.
- Establish a connected workplace to link banking employees across branches, offices and countries and drive interaction & collective working through sophisticated platforms.
- Capture, discuss and analyze lessons learned in successful and failed investments to avoid repetition of mistakes.
- Proactively identify and get into new opportunities and manage all the risks through collective experience and wisdom.
- Provide platform to facilitate financial analysis and collaborative business intelligence (BI) to ensure that data is turned into knowledge and knowledge into meaningful business actions.
Personal and emotional decisions and decisions taken with partial knowledge will only make banking risky. Conservative banking is not going to help the bank grow in any way.
3. Think in team to democratize innovation for effectively embracing new trends in banking. Ideas and new thinking can be implemented in day to day work.
- Portfolio management teams can share their ideas to identify new investment opportunities and grow in this highly competitive marketplace.
- Product teams can invent new products and market them perfectly through collective thinking to capture more mind and market share.
- Process team can think towards transforming the process for high efficiency and effectiveness that will give the ability to compete.
- Tellers and customer facing teams can think about better and faster response. Some of them can share their wisdoms on great customer service.
- Banking technology team can think about better tools for improving usability and enriching banking operation.
4. Learn perfectly in line with the personal and organizational objectives to build the high performance banking team through effectively delivering the domain, operational and technical knowledge. Smart banking needs smart team empowered by collective knowledge and best practices.
- Big changes such as adhering to the new banking standards & policies will cost banks so much of money if they continue to drive the learning in a traditional way. To drive growth, it is necessary to drive systematic self-learning through highly secured and personalized information access to digitized document, web links, video and audio library.
- Ensure smartness in banking and drive learning in a cost-effective way across geographical boundaries through perfect Organization-wide learning delivery.
- Provide high visibility into learning activities, skills gap and skills development and certify the people through quick & easy assessment.
Imparting knowledge such as international trade finance, new auditing standards, regulatory changes, trade law etc., lead to high cost. Hence it is necessary to embrace new model for effective learning. Many banks and financial institutions got stuck at traditional training model that can never scale up to the ambitious growth plans of banks. It is time to make that change to ensure that the bank becomes a learning organization.
5. Perform through optimized processes and align the right talent for the tasks on hand to deliver at the collective best. Financial performance will be directly proportional to how we build the right team for managing money and empower them to perform smartly.
- Systematically manage team competency plan, skills inventory, analyze gap and align them to right talent in the pool or drive recruitment.
- All activities need to be scientifically managed to maximize productivity and improve organizational excellence.
- People at the bottom of the pyramid should get visibility into what they need to do and how best it can be done by leveraging the collective organizational knowledge.
- People at the middle of the pyramid should scientifically manage the knowledge assets including people and maximize the outcome without stress.
6. Measure the return on investment and drive the progress of transformation in banking through systematic change management.
- Define the key performance indicators in all banking operations to monitor the progress and gaps.
- Monitor customer satisfaction. The quality of the banking service is directly proportional to the collective smartness.
- Provide great visibility into top management to facilitate decision making and drive right strategy for growth.
- Address the resistance to change through system thinking and perfectly communicate to create awareness among the employees.
Conclusion
As per the case study on The Bank of Tokyo-Mitsubishi, Ltd, “Many banks do not document the processes that lead up to closing a deal with the customer. That means that know-how such as how to interact with the customer, what information to obtain and what proposals to make to successfully conclude the deal has not been formulated into tangible knowledge. Needless to say, this type of knowledge is most useful to our frontline employees. So, for Project OPEN we needed a system that transforms that valuable information into explicit knowledge and shares it across branches and organizations smoothly.”
If BTM can benefit from systematic knowledge-driven approach to manage banking, am sure any bank can become smarter through institutionalizing knowledge. Our mind needs to be sharp when comes to managing money. No matter how much money a bank has, it should focus on systematically embracing knowledge and making more money through smart investments. Otherwise, the customers will go away because there will be more choices in this competitive world.
Solution
You can embrace – a complete end-to-end workplace transformation solution – to transform your bank. It can change the way the banking employees think, learn and perform. To know more, kindly contact .
