ING deploys AI to bond trading desk

Katana tool aims to reduce trading costs and allow traders to provide faster pricing for buying and selling bonds.

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.