Grants (2001-2003)

Knowledge Management in the Financial Services Sector: Understandings and Trends in Australia

Industry collaborative research supported by the Strategic Monash University Research Fund and commissioned by FujiXerox Australia Ltd.

The Environment
It is no secret that the business environment is changing at an ever-increasing rate. In the financial services sector, deregulation and re-regulation have created upheaval and added a compliance burden for many operators. Deregulation has opened the door to increased competition and created the additional challenge for financial services companies of redefining their core purpose and communicating an appropriate value proposition to the market. Increasing consumer sophistication has added further stress to the disaggregated operations of these companies.

In this environment, an organisational knowledge management strategy becomes a critical platform for sustaining core business capabilities and harnessing the capacity for innovation.

The Research
Earlier this year Monash University knowledge management researchers were commissioned by FujiXerox Australia to investigate the current status of knowledge management in the Australian financial services sector.

The project took the results of a survey of the top 130 Australian banking and insurance institutions, supplemented this data with a series of interviews with business leaders and compared the results with a similar European study. The mix of quantitative and qualitative data enabled a measurement of knowledge management trends to be made, whilst also developing a rich picture of perceptions and activities in individual companies.

Some Key Findings

• Almost all (92%) of surveyed organisations have in place, or are establishing, a plan to manage organisational knowledge.
  
• Although most of these are in the initial phases of a knowledge management strategy, they are far ahead of their European counterparts (41% of which have or are establishing a knowledge management plan).
  
• Two thirds of banks and one third of insurance companies have developed knowledge management mechanisms for sharing best practice. This was the only point of significant difference between insurance and banking organisations to emerge in the research.
  
• The average organisational investment in knowledge management in 2001 was 3% of total revenue.
  
• Australian financial institutions are less likely than their European counterparts to give priority to, managing knowledge for innovation or product development.

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