Domain knowledge for a business analyst is especially important as it enables them to perform his/her role more efficiently. 

Domain knowledge is the understanding of a specific industry, discipline or activity. Anyone can have domain knowledge in any subject, even those outside their job industry. 

First, it helps in having a better understanding of the business requirements. Without understanding the business, it is difficult, for certain domains.

Secondly, having deep domain understanding also enables a BA in adding value to the business processes, by leveraging previous experiences and suggesting better ways to implement a process.