PROPOSED KNOWLEDGE MANAGEMENT APPROACH IN OPERATIONAL RISK MANAGEMENT DIVISION OF BANK KARUNA

• Main Author: Putri, Cindy
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/53362
• Institution: Institut Teknologi Bandung

The increasing complexity and rapid changes of financial product/services and technology has increased the potential for operational risk events and losses in financial institutions, specifically banks. These environmental changes may introduce new risks and banks must be prepared to arm themselves with comprehensive knowledge. Over the course of the last decade, Operational Risk Management has evolved into one of the biggest concerns that is faced by organizations. Several precedent cases had shown that ineffective operational risk management in financial institution could lead to significant incidents that potentially contribute to the collapse of financial system. For this reason, Operational Risk Management staffs need to have adequate skills and knowledge to challenge critically and effectively and practices of internal control and risk. It is critical for organizations to identify and respond to emerging operational risk events quickly and effectively by building adequate capabilities such as the integration of operational risk management with knowledge management (KM). Operational Risk Management in a Bank is supposed to become a valuable partner of the first line of defense by assisting in ensuring the effective and comprehensive internal control and risk oversight. However, currently there are several Operational Risk Management related challenges identified in Bank Karuna’s ORM Division showing the lack of monitoring and oversight from ORM Division to strengthen internal control and risk. One of the contributing factors is the improper knowledge management in the division. Hence, the research objectives aim to identify knowledge management related issues in the Operational Risk Management Division of Bank Karuna and propose knowledge management approach in order to address the knowledge management related issues. Moreover, several frameworks used are the operational risk management process, SECI framework, knowledge-based operational risk management, APO framework, and KM implementation Strategy. The research is conducted with a Mixed - Method Design with primary approach of exploratory sequential mixed method, which combines the integration of qualitative research such as questionnaire and quantitative research such as interview. Knowledge Management related practices in ORM Division becomes the point of focus in the research through identifying and analyzing the knowledge management related issues consisting of people, process, technology, and governance aspects. Key issues highlighted is the knowledge sharing and storing as well as the collaboration and communication issues of the division. The proposed solution is a set of KM implementation approach which consist of defining and analyzing the strategic objectives, ORM Division Capability Gap, Critical Knowledge Gap, KM Objectives, KM Strategy, and KM Initiatives, accompanied with implementation plan and recommendation.