ING's bond desk to adopt AI tool for faster pricing
ING's bond desk will deploy Katana, a proprietary artificial intelligence tool that provides traders with market analytics, thereby enabling faster pricing when quoting to clients. First testing results of Katana on the emerging markets desk recorded faster pricing for 90% of trades and a 25% reduction in trading costs. The Dutch bank stressed Katana will not replace traders, instead said it will enhance traders’ decision-making abilities. ING said the use of Katana will better equip traders to deal with incoming Mifid II regulations, helping them to manage high trading volumes as the firm shifts to using electronic platforms. 

ING is rolling out a new artificial intelligence (AI) powered bond trading tool which has already been used on the firm’s emerging markets desk.

Known as Katana, the tool aims to reduce decision-making time and provide traders with analytics to choose what price to quote when clients buy or sell bonds.

The first results of testing Katana with the emerging markets desk in London saw faster pricing for 90% of trades and a 25% reduction in trading cost.

Santiago Braje, global head of credit trading at ING Wholesale Bank, explained in most AI use cases, there is a narrow focus on automation which restricts the technology to liquid asset classes where the trader is often replaced by the machine.

“With Katana, AI is applied to enhance the traders’ decision-making abilities, allowing them to deploy their natural intuition and expertise in the most effective way. This is a powerful combination,” Braje said.

ING explained Katana will better equip traders for MiFID II by allowing them to manage high volumes of trading and as flow shifts from voice to electronic platforms.

“Our traders stay fully in control, but are now better equipped to give the best quote to our clients every time,” Braje added.

Katana was developed by ING’s financial markets global credit trading team in London alongside the wholesale banking advanced analytics team who will continue to update the tool.