Antonis Antoniou: How technology is transforming Wealth Management

“New technological tools are now a prerequisite for the provision of a robust and comprehensive wealth service offering. These include, among others, platform investing, digital wealth planning, robo-investing, and real-time trading,” Antonis Antoniou, General Manager, Wealth Management & Global Markets at Eurobank Cyprus notes.

He was speaking to GOLD magazine following the launch of the Bank’s new Wealth Portal, the innovative digital access point helping clients seamlessly manage their investments and how investors position their portfolios in the current market environment.

Among other things, Antoniou also talks about the current state of the financial market and the importance Eurobank places on Wealth Management.

How important is Wealth Management at Eurobank?

With €11.7 billion in assets under management, Eurobank’s Private Banking Group is committed to delivering exceptional wealth management solutions that meet our clients' evolving needs from four different locations: Cyprus, Luxembourg, Greece and the United Kingdom. In Cyprus, the Wealth Management Division is one of the major pillars of the Bank ever since Eurobank Cyprus started its operations on the island. Our Division offers tailored banking, credit and investment solutions to High Net Worth Individuals, institutional investors, funds and fund managers. Our team comprises over 40 highly skilled and accredited professionals with long experience in the fields of wealth and asset management.

Technological advancements in Wealth Management are becoming increasingly important as they enhance the overall client experience. What technology upgrades and/or investments has the Bank made in the past few months, which you feel have given Eurobank a competitive advantage in this area?

New technological tools are now a prerequisite for the provision of a robust and comprehensive wealth service offering. These include, among others, platform investing, digital wealth planning, robo-investing, and real-time trading. Eurobank recognized this trend early on and launched an initiative to introduce cutting-edge technologies throughout its operations. More than a year ago, the Bank completed the full migration of its banking & investment business to a new platform offered by Temenos. We are confident that this platform has made Eurobank one of the leaders in this field and it has certainly transformed the Bank into a leading innovator in the local and regional market. More specifically for Wealth Management, our innovative Wealth Portal is the Bank’s digital client access point for the holistic management of their investment portfolios, 24/7.

Tell us more about the Bank’s Wealth Portal.

The Portal provides access to a wide range of online tools so that our clients can monitor and seamlessly manage their investment portfolios. Amongst others, these include:

• Real-time placement of investment orders in stocks, bonds, ETFs, mutual funds
• Access to insightful analytics and interactive views of their investment portfolios
• Automated risk profiling and direct matching with suitable investments
• Reception and evaluation of the Bank’s investment proposals

How would you describe the current situation in the financial markets?

During the first quarter of 2024, we once again witnessed a rally in equity markets as corporate earnings came out strong, particularly in the US. Even though current valuations are just above long-term average levels, these are supported by reasonable expectations concerning economic stability and a gradual easing of inflation and policy rates. We have also observed that the market rally is broadening to lagging indices like mid-caps, which is a positive sign for general market resilience. In fixed income, yields remain similar to last year’s attractive levels with investors still having the opportunity to secure positive returns on their bond investments after more than a decade of low/negative interest rates. That said, on a risk-reward basis, fixed income is more attractive than equities, as long-term yields offer better risk-adjusted returns compared to earnings yields on equities.

How sensitive to Central Bank guidance and rate decisions are the financial markets this year?

The markets have been particularly reactive to any guidance and, of course, interest rate decisions taken by Central Banks. The Federal Reserve’s decision to maintain rates in early 2024, amidst upwardly revised growth and inflation forecasts, has negatively impacted bond prices. However, volatility in bond prices has decreased compared to previous years when rates and inflation were persistently low.

For 2024, the market anticipates that the Fed will likely pivot towards implementing one or two rate cuts, totaling a decrease of 50 bps. Conversely, for the ECB, the anticipated cuts are expected to be more pronounced, potentially surpassing 100 bps.

What would you suggest to someone interested in investing in the public markets?

What will always be relevant when it comes to investing – which investors every so often take lightly – is the importance of diversification. Applying this simple principle and creating resilient investment portfolios can be of great value, by reducing volatility in the performance of investments over time. Furthermore, trying to do things like ‘time the market’ has always proven hurtful for investment portfolios. For this reason, many of our clients are choosing our managed investment service (Investment Advisory & Discretionary Portfolio Management), as this helps them maintain more discipline in the investment decision-making process, while having their portfolios monitored by our team of expert investment professionals.

What type of investments are your clients choosing in this type of environment?

Many of our clients have been limiting their cash balances for some time now, taking advantage of the high interest rate environment and allocating a portion of their wealth to short maturity and highly rated fixed income investments such as Treasury Bills. As the market reacts to Central Bank statements and guidance, we are seeing flows in relatively higher duration bonds so that clients can lock yields for a longer time period.

Within equities, clients prefer to stay invested in ‘high quality’ organizations, with strong balance sheets and resilient earnings. These organizations tend to outperform during periods of slower economic growth, which is the expected base economic scenario. Technology always warrants an allocation, as it is the sector that generates compelling disruptive trends like Artificial Intelligence.

A well-diversified portfolio always includes hedges against geopolitical risks, as these have become a critical factor driving volatility and shaping the direction of financial markets globally. Our client portfolios overall include allocation in such hedge strategies, as well as in precious metals and other commodities. All these alternative investments help in weathering market uncertainties and making portfolios more robust under various economic scenarios (irrespective of geopolitical tensions, important election periods, etc.).

(Photo by TASPHO)

This Special Feature first appeared in the May edition of GOLD magazine. Click here to view it.