Article | October 22, 2020

The Changing Customer Footprint

Source: Panduit

By Jennifer Vallarautto, Panduit

Small Retail Mobile Shopping

One of the consequences of the COVID-19 lockdown was the sudden shift away from traditional modes of financial services, notably the branch, to internet-based services. Whether the end user is a trader, an analyst, an actuary, a business owner, or a consumer, they will have been affected by these changes. These changes are likely to become more ingrained over time.

Financial services companies need to make sure their digital infrastructure is ready—ready to adapt to these changes and ready to merge or absorb businesses that will help them serve their customers better. To do that, they will need to move compute functions closer to where data is generated and analyzed.  

The shift to digital

FS institutions have seen an increase in customers moving online. Going forward, retail banking will need to turn to omnichannel experiences to survive—acquisition or consolidation could be the shortcut to achieve this.

For example, in China more than 800 bank branches closed during the lockdown. This created opportunities elsewhere: Ant Financial Services Group offers banks open banking services, including Hybrid IT solutions and mobile apps. The group, owned by Alibaba founder Jack Ma, saw a huge surge in interest over the lockdown in China, with paying customers up by 175%. It is now working with more than 200 lenders. Its growth encapsulates the potential symbiosis between established and challenger financial services businesses.

The fintech example

As the lockdown progresses, sudden changes in business valuations have made market consolidation more likely. Fintech upstarts have seen valuations surge and slower incumbents have seen the reverse. A correction seems imminent and M&A activity will be a significant part of new banking strategies.

As McKinsey partner Simon Blackburn explains in a recent edition of the Inside the Strategy Room podcast, “You need a strategy that’s robust in an age of digital disruption.” The future is uncertain, except in that further change is certain.

For incumbents, fintechs have the agility and services that consumers need beyond lockdown that help them adapt. For fintechs, the benefit of an alliance or merger is scale and new market opportunities.

The benefits of both

If we take the example of retail banking, we see a wide range of customers at varying ages with different needs. All must be served. Other financial services sectors like insurance, trading, or commercial banking have moved to digital services at different speeds but retail banking shows the widest possible variance in need and demand.

In February 2019 McKinsey examined the retail banking sector, looking at four shifts reframing and remaking the market. These all apply to other financial services.

1 – Distribution: when new branches represented growth, banks, insurers and others would explore new markets through their branches, extending their physical network.

Today this approach limits access to services and growth. As a McKinsey paper from February 2019, Rewriting the rules in retail banking, explains, “Today, the moats that banks have built are more likely to restrict their own progress than protect them from attackers.”

2 – Customer experience: Customers will pay for improved customer service according to Deloitte.  

For traders there is perhaps greater disruption. They no longer have to be at their desks and working at 6:45am and, as Reuters reported early in the lockdown, “Trading worth billions of dollars has shifted to kitchen tables or bedrooms as traders work through the coronavirus crisis from home, testing patchy fixes to make sure they stick to the rules.”

For traders, there are further unintended consequences. As lockdown took hold in March 2020, traders found their trades failed. “The pandemic has only strengthened the grip of electronic trading, with venues such as Tradeweb and MarketAxess seeing record volumes,” reported the FT.

3 – Productivity: Today, large financial services institutions benefit from the physical infrastructure they own, which makes these businesses highly productive. However, as technologies like machine learning and automation spread through the sector, these large incumbent businesses will see further gains in productivity, by as much as 30%-40% according to McKinsey.

M&A could give larger incumbents access to this transformational technology to further improve productivity.

4 – Rebundling: Specific financial institutions may once have ‘owned’ a customer – you may have banked with them your whole life and bought additional products from insurance to a mortgage from them. New, dynamic entrants and increased competition have fragmented the service package.

Large financial institutions now see a chance to ‘rebundle’ and claim more of customers’ spend by buying up these smaller (but often very large) financial services or fintech startups.

To meet these shifts in the market, financial services will require edge computing solutions. Panduit is uniquely positioned to provide infrastructure solutions for edge deployments. Our physical infrastructure solutions provide security, agility, and reliability, no matter the location.


The financial services sector has been at the forefront of changes to customer and client behavior over two decades. Now, the COVID lockdown has accelerated disruption in financial services as new behaviors emerge and stick.

These factors have opened the sector to increased M&A activity. Panduit gives your business the most secure foundation to take advantage of any merger or acquisition through use of Hybrid IT, Colocation and Edge computing.

With the experience to develop tailored systems using the right mix of physical infrastructure solutions, Panduit is the partner financial services companies need for successful M&A. You can trust us and our partner ecosystem to deliver predictable and measurable results.

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