Share with your friends

Road to New Reality

Podcast: Listen as CEOs reveal the future of business

Questions about the future of business? Introducing our Road to New Reality podcast series. Tune in as CEOs give insights into a post Covid-19 reality.

Listen to our podcast below or download from iTunes and Spotify


Was Covid-19 the spark that lit the match for the digital transformation of the financial industry? In the second episode of the Road to New Reality podcast series, our guest Eduardo Gramuglia talks about the role of technology during Covid-19 and the steps necessary to see real progress in the future.

Guest: Eduardo Gramuglia, Senior Vice President, Branch Manager  - Country Head, State Street Luxembourg
Interviewer: Ravi Beegun, Partner, KPMG Luxembourg
Host: Rachel Featherstun, Presenter, KPMG Luxembourg


RACHEL FEATHERSTUN: Ever wondered what Clark Kent and cloud technology have in common?

Well, you’re in luck.

This is road to New reality podcast and I’m your host Rachel Featherstun.

On this episode, Ravi Beegun, head of Asset management at KPMG sits down with Eduardo Gramuglia, Senior Vice President and Country Head of State Street in Luxembourg to discuss who and what will save the day for a financial industry at a crossroads.

RAVI BEEGUN: Thanks, Rachel. Eduardo, glad to have you on board today.

EDUARDO GRAMUGLIA: Thanks Ravi, good afternoon.

RAVI BEEGUN: So, I think today we're going to talk a bit about what we can look for in the future. You know, post Covid. I think one of the things that we've seen in terms of transformation happening, or at least a mindset; there's a meme floating around the Internet that says who's led the digital transformation of your company? Is it the CEO? Is it the CTO or is it Covid-19? So, Eduardo, what’s your take on it?

EDUARDO GRAMUGLIA: Well, I think that's a good meme. I actually used that for my strategy document with the leadership team whilst we were working through the Covid situation all from home. As the story goes, we were right about to…I took on the leadership role in Luxembourg in November. I was planning to take the team out for some offsite strategic meetings, too. And then Covid hit just like the week that we were planning to do it. So obviously that didn't happen. But then still the strategy needs to be built. We need to give certainty to our employees and to the market. And we were doing the sessions to be a video, and somebody sent that through. And I said, well, actually, let's put it on the strategy document. And the reason for it is because the strategy, as we were designing it before, is we were thinking about it before Covid, it got partly disrupted. Let's say, let's put it mildly, by Covid. So, yes, I don't think that Covid-19 led the digital transformation, it had already started in fairness. But I think it has been an accelerator, a strong accelerator of that transformation.

RAVI BEEGUN: So that's very interesting. In fact, in an article I was reading recently the author discussing how Covid has been the spark that lit the match for digital transformations. And here I just want to read a quote of his. It says…

“Nothing silences an individual’s or an organization’s inner perfectionist like a full-blown crisis. In response to dramatic disruption, many organizations have undergone a healthy renegotiation of their relationship to digital technology. Prioritizing “hey it works” over “after years of slaving over this initiative, this is the best we can do””. Do you think this is the way forward?

EDUARDO GRAMUGLIA: I do. I think the view is, is I share that view. I think connecting to what we were saying before about the acceleration, even if you look at the simple things, all this digital technology that we're using to communicate with each other in a state of lockdown, we had it, we just weren't using it. We've gone from zero to 98 percent of our people working from home and not just in Luxembourg, but across the globe. And so, the use of this technology has really increased exponentially. So much so that at the beginning we were having capacity issues, the providers were having capacity issues and others came around and so on and so forth. So, yes, what Covid taught us as well is that we have been probably slow in adopting new technology and transforming ourselves, just like the simple example of the communication tools that we're using now. There's a lot of red tape in an organization like ours, global organization, many stakeholders. When Covid came around, it was impressive how fast we could deploy 98 percent working from home. So, the demonstration is there. When push comes to shove, and I think Covid was that, we all smartened up and did what was right. Now we need to leverage that lesson. We need to capitalize on it. We need to make sure that what we learned in the last three months, we cannot forget after six, but use in the next five years, whatever the time period that this author is quoting. But I think for me, that is the important. That's what we're trying to do.

RAVI BEEGUN: Yes, so just echoing on that, I think technologies like Cloud really saved the day during the lockdown period. And so far, we have seen there was some reluctance to go into the cloud route. And as you say, the danger is that if people come back to the office, we may start forgetting about that. I mean, what steps should we take so we don’t start forgetting about that when we come back to the office?

EDUARDO GRAMUGLIA: I think it's upon us to start any type of transformation that we want to maybe or that we had in mind and we were keeping it on the side because there were other priorities. I think this is now the priority. And if we want to really capitalize on that, we need to start the process of adopting cloud technology or whatever that is, or maybe increasing it, expanding it whilst what was is still vivid in our memories. And it still is because Covid is still amongst us. It hasn't been eradicated. The vaccine has not been found. So, I think through the ups and downs that we will have in the coming months, maybe years, hopefully they'll come up with a vaccine before then. I think we should yeah, we should work and really remind ourselves of how helpful it was and how it can help us in the future. Hopefully not, because we're going to get other Covids, but because we've learned a lesson that it's very important to transform our industry. We have already been adopters of the cloud for some time. Now, for me it’s time... Luxembourg needs to drop a bit of those concerns that it has. I think, by and large, the regulator I think we’re going to touch upon that later. But the regulator has…. if I recall, it was on a call that we had on the AGM of ABBL. One comment from the regulator, from Claude Marx was that there was a lot of concern around the cloud computing, around cyber security etc., Covid forced the regulator to be a bit pragmatic about it and allow for organizations to use it a bit more widespread. And what they found out was that, you know what? It's worked. Now, let's not lower our guard. Cybersecurity is still a very important thing to bear in mind. High concern. But I think we we're looking at it differently across the industry and I’m not speaking for the regulator, but let's see what happens. We've been told that there's going to be a new circular this month. Let's see what that tells us.

RAVI BEEGUN: So, in terms of new technologies and where the future lies, where do you think…which are the technologies you think, you know, in terms of the financial sector for your own organization will be your focus, now, for the next months or years?

EDUARDO GRAMUGLIA: I mean, I think all of the above, why I say all of the above… what transformation has shown us, in the beginning there was a lot of buzz, big words around some of these technological advancements that would disrupt the financial industry, that would disrupt banks. I still think it's there. I think it was a bit more ambitious than what it could do. I think now the realization is that we can get there, but by small increments. So, what am I trying to say? I haven't seen any new product, innovative product coming out from Covid that can replace the current settlement systems that we have, that can replace Central Security Depository. I think, though, there are a lot of projects out there and be that crypto currencies, tokenization, they are slowly getting there. And I think with time, that's probably where the industry might go. There's still a lot of things to prove because what we have, let's say it's not broken. It's just a bit slow and dated, but it's not broken. And if we consider the amount of transactions, money that we still process through the old systems, the let's say, the “old way” … it's still coping. So, we still need to see those great ideas not come out, they're out there, but really manifest themselves and become more concrete. So, what specifically? I mean, all of the above, cloud computing, it's now it's here. We've seen it through Covid, let's push. Communication technology, it's here, it's now, it's brewing. Let's push. We still need to cater for the current needs. For the BAU, as they call it, for the markets to continue to operate the way they have to for, for resiliency etc. For the future, lets look at tokenization, let’s look at crypto currency, let’s look at bitcoin, lets look at DLT, whatever you want to look at, all these big words. Let’s look at what will work and what won’t work. I think as I say, right now what we’re seeing, a lot of those large projects which were a bit too ambitious and no one has really proved that they work, if we start reducing them and doing a bit at a time, I think we’re going to get there.

RAVI BEEGUN: Alright, in terms of innovation, I think some industries are seeing we will see five years of innovation in the next 18 months, do you think that applies to technology in the financial sector or innovation?

EDUARDO GRAMUGLIA: As I say, I haven’t seen anything innovative as it relates to a lot of what we do, but I have certainly seen acceleration of a lot of the projects that were already there. Will we do five years in 18 months? That’s quite aggressive, I think. We’re still the industry that we are, we are still the organizations that we are. Maybe in some areas we’ll see, I don’t know, crypto currencies, if they really are a solution to a problem out there, we’ll see them accelerate. The whole industry, I doubt it.

RAVI BEEGUN: What we’ve seen as well, this year Alfi set out their 2025 Ambition paper so one of the objectives they have there, we need to drive innovation and the digital transformation of the Luxembourg Fund Industry. In that context where do you think the Luxembourg Fund Industry should be focusing to achieve this digital transformation?

EDUARDO GRAMUGLIA: Several areas, I think if I can boil it down to, it is the data. I think a lot of the intersections of the initiatives of the 2025 ambition paper resides in the data. So, if you want to go ESG, digital, whichever direction you want to go… at the core of that transformation, at the core of that acceleration to be able to do it in five years is being able to master the data. And I don’t think we’re quite there yet. The data in terms of, for example to be able to assess the industry with one metric. If you are looking at the alternatives industry, the growth it has, we still don’t have really the data that is able to tell you what the alternative regulated business versus the unregulated business. What are the products that are more in demand versus others that are a bit straggling there. And then if you look at ESG right now, getting ESG labels, being able to call yourself ESG, being able to promote that area in Luxembourg, which Luxembourg wants to do I think a lot of the key in that is still in the data because there are a lot of things that need to be normalized. A lot of the metrics, a lot of the ways you measure what is ESG and what is greenwashing. The data is at the core of all of this.

RAVI BEEGUN: I mean data is a big topic, even at an organizational level, how do you really make progress on data?

EDUARDO GRAMUGLIA: Well we launched a data business line global exchange, which was launched several years back now with the acquisition of CRD, but also with the creation of the alpha platform which is a platform created for front office systems. The acknowledgement is that data is at the core. The acknowledgement is that we are coming from the back office trying to make a difference versus our peers to asset managers that are coming from the front office. At the center was this middle office that was always very manual, undigitized if you want, that needed a bit of automation and straight through processing, at the core of all of that was the data. You need one data source, one main data point that for the fund manager starts from the trading, from the input on the front office system. Which we didn’t have, and from us, comes the TA, from the investor, that we did have. How do you marry the two? Well for us, I think we found agreement within the organization that mastering the whole transaction from the beginning from the end, from the front to the back, now it is Alpha. It is basically mastering that data from end to end having one data source and creating one data point that will be the one that will be reconciled across the whole value chain. I think as an organization we found the agreement that that was the solution. We are having I suppose some validation of that vision with the work that we are doing with asset managers, clients, current clients and new ones that we are talking to.

RAVI BEEGUN: Now if we talk about the role of the regulators, and the legal system, when we talk about data, when we talk about transformation, sometimes there is a feeling that the current laws and regulations are not really adapted to really encourage the transformation. Where do you think we need to work more with the regulators to kind of make innovation and transformation easier for the industry?

EDUARDO GRAMUGLIA: We are currently preparing a letter and the subject is - I think I have found that as an industry, in Luxembourg we use regulations also sometimes to hide ourselves, to protect ourselves. Luxembourg has become very global, it is a cross border industry, a cross border market, we cannot afford to be insular any longer. Now when I took this role, and I have asked lets use this technology, why do we have what we have, and I’m not going to go into the details on that, but it always comes back to me because the regulations don’t allow and we have a committee that’s looked at it… and at one point I got a bit upset. I said, can someone black and white spell out exactly where the issue is. When we start challenging ourselves, it’s not so black and white, regulations have progressed a little bit. Not as much as we’d want it, but a little bit. And, there are certain things that we can do that we think we can’t. That we always say that regulations haven’t allowed us. But with that challenge, we are now going to give our views to the regulator, and to the ministry of finance, and just spell out from our perspective, what are those rules that still cause a bit of let’s say a bit of an impediment, for us anywhere from adopting technology that the group has already adopted elsewhere that we could leverage here, and sometimes we find we need to duplicate the set ups because of the regulations. So, as I say, it’s a bit of an internal and external challenge. I think for the regulators what we can do, what we have to do is, really spell out factually, concretely what is in our view, as a global player, what is a kind of a hindrance. Not because, it might not technically prohibit something, but because when you are trying to apply it, and, it is quite constrained, it does slow us down, it duplicates things and ultimately makes us drop down certain projects. We will just express our views, I think some regulations were written 40 years ago for a financial industry that was a private banking industry, private banking is still there, but the fund industry is quite more prevalent at this point. So, some of the constraint and some of the rational for certain regulations maybe can be reviewed. I am not saying it will change, but let’s give it a try.

RAVI BEEGUN: Which is good because I think the regulator in Luxembourg has said they want to go more digital in the future, so I think that is a good place to start from.

EDUARDO GRAMUGLIA: Absolutely, that’s what we are going to be doing.

RAVI BEEGUN: To end our conversation on a more positive note, what do you think are the positive changes you hope this pandemic will bring about?

EDUARDO GRAMUGLIA: Somebody asked me in another conversation, who’s been the winners and who’s been the losers of Covid? Covid has been a tragic situation so I don’t think there are any winners, if I can point to one, that’s been the environment. Look at the streets, less cars, look at the mileage on your own car, or the air miles on your loyalty plans, I don’t think that that could have been fathomed anywhere closely to what it has been, and I think that has been a good thing. The economy obviously has suffered from it because a lot of the people who make their living out certain industries and businesses haven’t been able to do so. I think we are going to have to find the balance somewhere in the middle because what we have been able to do from an environmental perspective is quite astonishing and it is something we should value and try to maintain to the extent possible for the generations to come.

RAVI BEEGUN: In five words or less what would you say is the current state of the financial sector?

EDUARDO GRAMUGLIA: I would say it’s at a crossroads.

RAVI BEEGUN: Eduardo, thank you very much, it’s been great!

EDUARDO GRAMUGLIA: Thank you, it’s been a pleasure.

Covid-19 has put business continuity plans in the spotlight. In this first episode of the Road to Reality podcast series, our guest Sean O'Driscoll talks about planning for any eventuality, no matter how improbable.

Guest: Sean O'Driscoll, Managing Director - Country Head, Universal Investments
Interviewer: Stefan Kraiker, Partner, KPMG Luxembourg
Host: Rachel Featherstun, Presenter, KPMG Luxembourg


RACHEL FEATHERSTUN: There’s a light at the end of the tunnel, and with this light comes a new reality. But what will this new reality mean for the future of business? Listen as CEOs give the partners at KPMG their two cents of advice on how to best prepare for a post Covid-19 economy. My name’s Rachel Featherstun and this is Road to New Reality podcast. Each episode will give listeners an inside peak at lessons learned and what to expect for the future. In this episode we touch base with Sean O’Driscoll, Managing Director – Country Head at Universal Investments in Luxembourg who emphasizes the importance of being prepared for any risk regardless of how outlandish or improbable it might seem!

Over to our asset management Partner Stefan Kraiker to kick off the conversation.

STEFAN KRAIKER: Thanks, Rachel, for the introduction, hi everyone, I am Stefan Kraiker and I am an asset management partner here at KPMG Luxembourg. So Sean, thanks for being on the show today, my first question is….

Why was Universal able to respond so quickly to the crisis?

SEAN O’DRISCOLL: The regular BCP testing, the ones that we all go through on an ongoing basis, and our teams wonder why we go through this on an annual basis. Those well-designed plans and the tests themselves really is what led us to be in the position that we are in now to service our clients and continue managing through this crisis.

STEFAN KRAIKER: So, what will you be taking forward from this as we go into the next phase of building resilience?

SEAN O’DRISCOLL: The crisis did highlight how flexible models must be and how capable we must be to adapt and that we need to anticipate risk whose probability may sometimes seem very low, this is crucial which we have gone through in the BCP testing and sometimes can be easily overlooked.

STEFAN KRAIKER: Now a major part of Business Continuity is homeworking. Did all go perfectly to plan?

SEAN O’DRISCOLL: We had some concerns outside of the normal environment, we are in the home office or we are in an offsite location. Can we still work together while working on different projects or complex issues or challenges there? So that is something that we quickly overcame based on the technology that we had in place leveraging the audio and the visual. This really worked well with our clients with our teams with board meetings. So that challenge that we faced, quickly went away as we started to work in this environment.

STEFAN KRAIKER: How will you build out from this as we go into deconfinement?

SEAN O’DRISCOLL: So, the way we look at it is we didn’t come this far to take multiple steps back, so we really wanted to take a measured approach here. On the basis and coordination with the government and regulators of course. Our approach would be to apply a partial and gradual deconfinement. We remain flexible with our team based on their personal situations, I think that is key for us. We don’t want to force people back into the office we have the technology, we have everything up and running it’s working very well so we really want to make sure that we take the right approach for our colleagues and to manage the business. In preparation for our team’s gradual integration back into the office we will implement the regulatory requirements of course, along with probably stricter measures of number of employees per office, the two-meter distancing, necessary protections such as masks, barriers if need be. We will have rules visible throughout the building just to make sure that it’s clear. And of course, we will be circulating that to teams before they come back to the office and when they come back. Other measures we may take is we will have a further clean desk policy, so disinfecting work areas, issuing masks, gloves where necessary, every employee will have hand sanitizers available to them. We really want to make sure we have strict measures also including those common areas such as kitchens and elevators. So, you know, once again the health and safety of our employees is our priority the team is our biggest asset, so we need to remain flexible, it is crucial for how we manage this crisis going forward and how we go forward with the integration plan. How we are organized now, our set up and our approach really allows us to easily adapt to different scenarios. We’re in a good situation there…. taking into account we’re in a crisis situation.

STEFAN KRAIKER: Yeh, it feels like the industry as a whole has reacted really well to such an unusual scenario…

SEAN O’DRISCOLL: I think that in my experience going through this everyone that I’m dealing with is prepared and is going very well! And if we’re not, in my personal view we put the risk on our clients and also the industry.

STEFAN KRAIKER: Now let’s turn to the new reality post Covid-19. Should we expect any surprises or changes to asset allocation?

SEAN O’DRISCOLL: What can be observed in my view is that when a crisis happens, they rethink their allocation. So, I think there’s been a focus on ESG, it’s not an asset class as such but ESG has outperformed many other asset classes. And ESG has gained momentum over the years for obvious reasons. The question will be has this crisis given it further impetus? We experience continuation of traditional asset classes, alternatives is the same. I mean we service 90% of our products are in the alt space. This has been an ongoing trend and based on what we see from our clients it continues to go in that direction. What we will have to look at is the repricing and real estate market and illiquid assets as well. That’s still to come but we’ll see where that takes us.

STEFAN KRAIKER: So, you think we’ll see a real change?

SEAN O’DRISCOLL: For us what we see it seems like it will be a long term out performance of ESG. It seems that may continue. Based on what I was highlighting earlier and then if we look at the crisis, how we’ve experienced this crisis. How the countries, or some of the cities, major cities, you know the drop-in pollution levels, the clear waters in Venice, wildlife adventuring into areas that normally they’re not seen, where humans are. So, this is really taking a change to the environment. Do we take a step back and go greener? Focus more on sustainable investments? You know, I think time will tell.

About Road to New Reality podcast

There is no handbook for recovering from a pandemic crisis and no two businesses will rebuild the same way. Listen as CEOS reveal what comes next for their business.

Bookmark this page to access the latest episode and replay your favorites.


Ravi Beegun


KPMG Luxembourg
Tel.: +352 22 51 51 6248

David Capocci


KPMG Luxembourg
Tel: +352 22 51 51 5110

Chrystelle Veeckmans


KPMG Luxembourg
Tel.: +352 22 51 51 6244

Valeria Merkel


KPMG Luxembourg
Tel.: +352 22 51 51 6732