ING has introduced a new artificial intelligence (AI) tool designed to improve decision making in bond trading.

Named Katana, the system uses predictive analytics to help traders decided what price to quote when a client wants to buy or sell a bond. The tool also provides traders with a visualisation of relevant historic and real-time data, which helps to assimilate information more easily, make faster and sharper price decisions, and create better liquidity for clients.

Since testing Katana at its emerging markets desk in London, ING has benefitted from faster pricing decisions for 90 per cent of trades and reduced trading costs by 25 per cent. Traders have also been able to offer clients the best price four times more frequently.

The bank noted that traders will also be better equipped for MiFID II when it comes into effect in January, as the tool helps them manage higher trading volumes and better prepares them for further acceleration of the markets.

Santiago Braje, global head of credit trading at ING Wholesale Bank, explained: “We have seen some examples of applied AI on the trading floor before, but in most cases they have a narrow focus on automation, which restricts them to liquid asset classes where the trader is replaced by a 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. Our traders stay fully in control, but are now better equipped to give the best quote to our clients every time.”

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