By Kenneth Owusu Asante AMPONSAH
Managing employee knowledge and skills—termed “human data”—is a critical but frequently overlooked aspect of risk management in financial institutions.
This article explores the importance of maintaining dynamic, up-to-date employee knowledge to reduce risks, improve decision-making, and enhance organizational performance.
Human Data as a Double-Edged Sword
Employees represent both the greatest source of risk and opportunity for financial institutions. A single poor decision, often stemming from outdated or incomplete knowledge, can undermine years of effort to optimize business practices. Conversely, informed, well-trained employees can unlock significant rewards.
No matter how diligently an organization works to comply with regulations, implement and monitor robust policies and procedures, and enhance its image in the marketplace, a wrong or fraudulent decision by just one employee can undermine the millions made, and countless hours invested in optimizing business prospects.
For instance, a loan officer relying solely on outdated training may approve a risky loan, leading to financial losses and reputational damage. On the other hand, an astute credit analyst may identify hidden opportunities in a borrower’s financial profile, leading to a profitable long-term client relationship.
In my career, I’ve encountered both scenarios and witnessed their impact—both positive and negative—on the overall strategy of an institution. In each case, banking professionals had access to extensive data and transparency. The key factor in the outcome was whether they applied sound credit and risk principles or failed to do so.
The Problem: Stale and Outdated Human Data
Organizations often invest in one-time training initiatives but fail to implement ongoing processes to keep employee knowledge current. As the speed of change accelerates, the “half-life” of skills—the time it takes for a skillset to become half as relevant—is estimated to be about five years. Without continuous learning and updates, employees risk making costly errors.
Performance consultant and learning expert Jane Hart notes that, “the half-life of a given stock or skill is constantly shrinking – and is now around five years.” In practical terms, this means that by the time an employee is seasoned and comfortable, the definitions of seasoning and comfort have changed, often dramatically.
All banks provide training for their employees to some extent. However, what is often overlooked is a dynamic and focused approach to developing what I call “human data”—the core knowledge and skills employees need to thrive. While most organizations prioritize performance, few fully grasp the rapid pace of change in their employees’ areas of expertise.
The probability of errors creeping into an employee’s work output rises at an increasing rate farther away from what he or she gets from fresh, relevant human data. Knowledge and skills age so rapidly that the likelihood of employee error approaches 100% by the end of the five-year period.
Interestingly, employees themselves are often the first to recognize the importance of staying professionally current. They understand the personal stakes involved—keeping their jobs, advancing their careers, and remaining competitive in a fast-evolving landscape. For employees, the urgency of up-to-date skills and knowledge is not just professional; it’s deeply personal.
The Need for Dynamic Learning Environments
Institutions must move beyond traditional training methods to adopt a comprehensive approach that integrates formal training, self-directed learning, and social collaboration. This approach, referred to as a “learning and performance ecosystem,” connects employees to diverse learning opportunities while maintaining organizational oversight.
Most organizations lack the budget and flexibility to keep up with every change in today’s fast-evolving business landscape and effectively communicate these shifts to all employees. Doing so would require substantial expenses and administrative efforts that few companies can sustain.
However, financial institutions can take a more proactive approach by creating structured yet flexible environments that blend formal training with self-directed and collaborative learning. This approach ensures employees stay professionally relevant in a deliberate, rather than coincidental or accidental, manner.
Once employees are active in the workplace, adopting a thoughtful and dynamic learning strategy becomes essential for preserving their knowledge and skills. Organizations that neglect this risk falling behind—and often very quickly.
According to Marc J. Rosenberg and Steve Foreman, such ecosystems enhance individual and organizational effectiveness by incorporating six interconnected components:
- Talent Management
- Performance Support
- Knowledge Management
- Access to Experts
- Social Networking and Collaboration
- Structured Learning
These components ensure employees have continuous access to fresh, relevant knowledge, significantly reducing the likelihood of errors while fostering innovation and growth.
Integrating Technology to Elevate Human Data
Modern technologies can play a transformative role in managing human data effectively. AI-powered tools and machine learning algorithms can help institutions:
- Personalize Training: Tailor learning programs based on individual needs and job roles, ensuring relevance and efficiency.
- Monitor Skill Development: Use analytics to track employee progress and identify gaps in real-time.
- Automate Routine Tasks: Free up employees to focus on strategic decision-making by automating repetitive processes.
For example, virtual reality (VR) simulations can offer hands-on learning experiences, while AI chatbots can provide instant support and guidance to employees on complex tasks. These tools not only enhance human data but also improve employee engagement and satisfaction.
Institutions that have the vision and determination to adopt integrated learning and performance ecosystems—or key elements of them—will gain a significant competitive edge in both the medium and long term. While there is no universal solution, a deep appreciation for the value of human data and the critical need to continuously enhance it forms the foundation for success.
The Role of Organizational Culture
A robust organizational culture is essential to sustaining efforts to optimize human data. Leadership must:
- Foster an environment that values continuous learning.
- Encourage open communication and collaboration.
- Recognize and reward employees who demonstrate skill growth and adaptability.
Companies with a culture of learning often see higher employee retention rates and greater overall productivity, as workers feel supported and empowered to develop professionally.
Recommendations for Financial Institutions
- Invest in Continuous Learning: Shift from one-time training programs to dynamic, ongoing learning initiatives. Emphasize both formal training and self-directed, socially driven learning opportunities.
- Leverage Technology: Adopt AI, machine learning, and other advanced tools to enhance training, monitor performance, and streamline operations.
- Foster Learning Ecosystems: Create structured environments that integrate talent management, knowledge sharing, and collaborative tools to keep employees engaged and informed.
- Monitor and Update Skills Regularly: Establish metrics to quantify employee knowledge and skills. Use this data to identify areas for improvement and implement targeted training interventions.
- Encourage Organizational Buy-In: Ensure leadership at all levels supports a culture of continuous learning. This commitment can drive significant improvements in both individual and organizational performance.
Conclusion
Managing human data is essential for financial institutions aiming to minimize risk and maximize reward. By adopting integrated learning and performance ecosystems, leveraging technology, and fostering a culture of continuous learning, organizations can reduce errors, improve decision-making, and unlock untapped potential. Institutions that prioritize the optimization of human data will gain a competitive edge in today’s rapidly evolving business environment.
Organizations that understand this and go beyond traditional training to foster a culture where learning and performance are seamlessly intertwined—embraced and supported at every level—will shift the balance decisively toward reward over risk.
This approach not only minimizes mistakes but also maximizes human potential and corporate profitability, driving sustained growth. Such is the transformative power of human data and the importance of prioritizing its development.
Credits: Kevin Hadlock (Senior Director- Moody’s Analytics)
The writer is the Chief Risk Officer, UBA Ghana
The post Getting human data right: key to managing people risk issues in 2025 appeared first on The Business & Financial Times.
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