Knowledge-based Banking: Fostering A Knowledge- based Management Culture

Knowledge Management is a relatively new practice in the banking sector. It is the after effect of the financial liberalization of domestic banks depicting the claims that the operation of bank organizations revolves around knowledge. This study analyses the practice of knowledge management from the perspectives of Procurement and Empowerment of knowledge, Training and Mentorship, and Communication and Incentives in the domestic banking sector. Based on the results of a questionnaire survey administered on the human resources management of 10 local commercial banks in Malaysia, four aspects of procurement and empowerment of knowledge, six aspects of training and mentorship, three aspects of communication and two aspects of incentives were analyzed to see the differences. The results proved the hypothesed existence of knowledge management practices in all the four aspects analysed. Firstly, the main items for knowledge management practices in the aspect of procurement and empowerment of knowledge showed that bank organizations procured and used knowledge from industrial associations, competitors, customers and suppliers. Secondly, the aspect of training and mentorship obtained its main items for knowledge management practices by encouraging workers to continue their education through reimbursement of fees for work-related courses. Thirdly, in the aspect of communication, the preparation of written documents such as procurement of benefits, training manuals, positive work practices, and printed articles (organizational knowledge) served as the primary practice for knowledge management. Finally, in the aspect of incentives, knowledge infused financial and non-financial incentives were practiced consistently. In conclusion, bank organizations should accept and practise knowledge management as a new best practice