Protecting Knowledge in the Financial Sector: An Analysis of Knowledge Risks Arising from Social Media

Abstract

The financial sector is characterized as knowledge intensive with knowledge as the key source of competitive advantage. The introduction of social media within the organizational environment has raised the number of risks that can lead to knowledge leakage and thus to a loss of competitive edge. We investigated knowledge risks arising from the use of social media within the financial sector. We interviewed twelve employees from ten different European financial institutions. Based on the interviews we identified strategies how financial institutions currently deal with knowledge risks. It appears that financial institutions are skeptical towards social media establishment and they currently implement a number of technical and organizational measures. However, competition forces financial institutions to adopt social media and to change their attitude. We found that financial institutions adopt different strategies towards social media and we show which strategies correlate to the major knowledge protection risks.