The banking landscape is gradually changing, what with much advocacy on the need for banks to go back to the basics of banking. But what exactly is the basics? Retail banking! Currently, there is a great debate going on across the globe on the need for banks to consolidate on the retail banking to help them boost their earnings. Top on the list of the debate is whether or not retail banking should be separated from large corporate and investment banking.

For the benefits of retail banking to be realised, many financial experts recall how the practice evolved before it was pushed aside by investment banking. They said it should be hinged on a sacred responsibility; needs an ethical underpinning; should be different from corporate banking; should be totally different from investment banking and that it should be all about knowing the customer.

How did retail banking evolve in Africa? It began in a typical African context when a group of people in the village came together to save money. After savings, the money was lent to a member of the group who invested it on productive purposes, though at a local level. As businesses evolved, there were other ones in the form of credit unions which include informal savings and loans institutions, building societies, co-operative banks, savings banks, credit unions, post offices and then commercial banks. As a retail banker, you have a responsibility to the consumer.

At the beginning of this year, Boston Consulting Group noted that in 2008, retail banking activities accounted for 55 percent of the revenues generated by the 140 banks on its global database, up from 45 percent in 2006. Some icons like Citibank (the first global consumer bank), Stefan Kaminsky's KKB in Germany, Banco Popular in Spain, Cetelem in France, Bradesco in Brazil are banks of all kinds that brought banking to the masses. While these banks are known for their role in retail banking, there were some mistakes of Western banks like Bancassurance/Allfinanz, mergers of banks and insurers, retailing culture, hard-selling, mis-selling, predatory pricing.

Where did Nigerian banks go wrong? Michael Lafferty, chairman Lafferty Group, gave an insight into the mistakes of Nigerian banks.

"Mistakes of Nigerian banks include; speculative/deal-making culture at the top, domination of boardroom by corporate/wholesale bankers, no interest in consumer or Small and Medium Enterprises (SMEs) banking in many major banks. The greatest mistake of the lot is universal banking," he said.

Attempting to answer the question as to what went wrong with universal banking, Lafferty said: "Barriers between retail/commercial banking and investment banking disappeared in 1990s. Investment bankers took control of the world's retail banks - now called universal banks, consumers were 'used and abused' to serve the purpose of the investment banking divisions, mis-selling and predatory pricing became the order of the day.

"Looking at the European-American-Nigerian banking crisis, it was not a recession but largely man-made. Though origins lie in the US sub-prime scandal but investment bankers were out of control. Banks were taking crazy risks which they did not understand. Politicians mesmerised and compromised. Retail bankers should be trained like professionals in medicine, law, accountancy, architects," he noted.