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Chairman's Corner | Michael Lafferty
29/06/2015

RBA Focus logoIn the aftermath of the global financial crisis, great efforts are underway around the world to reform the banking industry.  The general thrust today in most countries is to focus banks on retail and corporate banking – and away from investment banking. 

Inevitably, this means that retail banking will be the dominant activity of banks in these territories for the foreseeable future.

Before too long perhaps the terms ‘banking’ and ‘retail banking’ will be synonymous – and investment banking will go back to being a separate industry.  This would certainly be in the best interests of retail banking customers.

Michael Lafferty, laughing wholeheartedly at a comment from the audienceI first became interested in banking, and retail banking in particular, back in the late 1970s, when I took over as banking correspondent for the Financial Times. 

This brought me into contact with a number of new thinkers, who were fascinated by the power and potential of the consumer banking sector – people like; John Reed, who had the vision to create a global consumer business and went on to become CEO of Citibank, Dee Hock, the visionary thinker behind Visa and not least Stefan Kaminsky, the bearded German humanist who created KKB, the world’s first consumer-only commercial bank.

I also encountered some fascinating banks like Banco Popular in Spain, which had decided to focus on SMEs and consumers rather than large corporates.  Here I encountered principles-based banking in action for the first time. And Bradesco in Brazil, a giant of a bank built up by a German emigrant who also provided schools and healthcare for the staff in what came to be known as Cidade de Deus, the City of God.

All influenced me greatly and taught me that there really is a world market for consumer banking – because people have far more in common than divides them – and that the provision of these services is a sacred responsibility that should only be the prerogative of professionals, who will always act in an ethical way.

We launched the Academy because client banks all over the world wanted us to create it.  They had been complaining for years that professional retail banking education was just not available – and this was the case in country after country, continent after continent.

As chairman of the Retail Banking Academy, I am a strong advocate of retail banking becoming a profession – and I passionately believe that retail bankers should be required to act in the best interests of their clients at all times.

Five retail bankers, three women and two men, facing the camera and smiling, above the RBA banker's oath. 

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