Eduardo Gramuglia Pallavicino is no stranger to Luxembourg. Educated in South America and Italy, he’s worked in grand duchy for 26 years, serving as general manager of the Luxembourg branch of BNY Mellon Asset Servicing, head of relationship management at Brown Brothers Harriman, senior vice president-country head of the Luxembourg branch of State Street Bank International and chief revenue officer of the fintech Next Gate Tech. Gramuglia Pallavicino joined Citi in May 2023 and was in September 2024.
Citi, for Gramuglia Pallavicino, was a new world. “Luxembourg is predominantly a fund industry, but it also has a banking and finance industry which is very active and--quite frankly--larger than people assume it is. There’s a lot of revenue generated here, with a lot of companies domiciled here,” he told Paperjam during an interview in late March, around six months after his appointment. “The connectivity we have is phenomenal.”
And Citi wants to capitalise on this to expand its business. “Not only [do we want to] grow our investor services business, our services business in general, our wealth business--which is already quite well-established--but also banking and markets.”
Following a global structural organisation led by Citigroup CEO Jane Fraser in 2023, Citi now has five core interconnected businesses: services; markets; banking & international; wealth; and US personal banking. “The fifth one--US consumer banking--is the only one we don’t have in Luxembourg, for obvious reasons,” said Gramuglia Pallavicino. “My idea is to bring to bear not just the connectivity that we have globally,” but also “the synergies that we have across the businesses. And basically to ‘connect the dots’ to continue growing.”
More focus on front-office
And is Luxembourg a good place to lead that growth, versus--say--Paris or Frankfurt?
“I think all places have their pros and cons,” replied Gramuglia Pallavicino. “I look after Luxembourg, and my goal is to maximise Luxembourg, grow our market share, grow our revenues, grow our visibility, grow our brand.”
The bank--which has been present in Luxembourg since 1970--employs roughly 270 people in the grand duchy and there are no plans to increase the headcount. “What I do plan is very much in line with what you hear from Tom [Théobald, CEO of Luxembourg for Finance], from the government. I want to be more front-office, so, more client-focussed, to be a centre of excellence for client services, client management and oversight,” he explained. “My intention is to help our clients that are outside [the country] to understand Luxembourg better,” he continued. Say, for example, there’s a new regulation: is this relevant for a client; if so, why is it important; how does it apply? “That’s where I see we can add value from Luxembourg.”
“We can also add value by bringing the different businesses together for a, maybe, unique type of opportunity that is present in Luxembourg,” said Gramuglia Pallavicino. The alternative fund industry, for instance, is not necessarily a “unique opportunity,” but it certainly presents a large area of growth. It’s “an asset class that has grown massively,” globally but also specifically in Luxembourg.
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“If you look at the range and variety of products that we--as Citi--have, we can put on the table solutions for our clients that go beyond just asset servicing or opening a bank account. We can open the bank account, manage the liquidity, service the funds, be the depositary, be the custodian, provide the liquidity itself, provide financing--and that goes all the way from services to markets to banking.” There’s a full range of services that allows Citi to “connect the dots” for clients. “Being much more proactive, solution-oriented: for me, that’s where you add the value. That’s where a bank really adds the value to its client.”
“Embracing tech”
Artificial intelligence is an oft-mentioned tool that that could help accelerate manual processes and free up time for people to work on value-added activities. “Artificial intelligence is great, but we need to be very careful with the data because we [banks] have a set of regulations that is quite stringent and important to follow.”
Citi, therefore has its own initiatives, such as “internally-developed systems” that are tested internally and allows the bank to keep control over the data, said Gramuglia Pallavicino, unlike ChatGPT and similar tools. “So we have our own labs; we have our own teams that develop AI. We have a couple of our [own] versions of ChatGPT within the various businesses that’s being developed, and those are being piloted right now.”
The technology is already there. It’s about us embracing it.
Working at Next Gate Tech before coming to the bank, he added, “really opened my eyes in understanding that the technology is already there. It’s about us embracing it.” Citi partners with fintechs to provide technology, noted Gramuglia Pallavicino, and they’re also looking at the development of digital assets.
“The opportunities are multiple”
When it comes to challenges and opportunities, there’s a major opportunity in the size of the market, said Gramuglia Pallavicino, given the financial industry is generates over 25% of the grand duchy’s GDP. “As a bank--with all of the businesses that we have--the opportunities are multiple. Given our global presence, our international client base from Luxembourg, given the businesses that we have--once we start connecting the dots and banking our clients and servicing our clients, the opportunities for growth are good.”
I’ll continue insisting on our global presence and international connectivity to our clients
He noted the country’s stability and the global “brand” it has built in the fund industry as “large components” of what helps Luxembourg’s continued growth. Although the macroeconomic environment and the accompanying uncertainty could be a bit of a headwind, it’s not necessarily a challenge. “It also creates opportunities. Again, I’ll continue insisting on our global presence and international connectivity to our clients, because when there’s maybe a challenge in a certain direction, we can also help our clients to go in another direction globally, with their business, with their geographic presence. We can be their partner here, in the United States, in Asia, in Africa--for us, this is not a problem.” Despite being headquartered in the US, Citi is more of a “global bank,” with “on-the-ground” presence in 24 European countries.
Besides connectivity, clients expect a “safe pair of hands,” said Gramuglia Pallavicino. “Hence our focus here--and globally--on oversight, on controls, risk management, compliance. All of that is big on our agenda and here in Luxembourg as well.”
“Luxembourg is important to Citi. A lot of what we spoke about, that we’re doing requires investment, and there is an acknowledgement, there is a willingness to invest in Luxembourg,“ he concluded. “Our presence here is quite long-standing, but it’s here to stay, and it’s here to grow.”