ING is in advanced trials for a prototype technology tool called Katana Lens, aimed at asset manager clients that invest in emerging market (EM) bonds.
It may prove important in two ways: as a potential proof of the usefulness of artificial intelligence (AI) and predictive analytics in generating alpha in bond markets, and as a marker for how far banks can evolve into technology providers to their clients.
In December 2017, ING announced – to almost no fanfare – the first version of Katana, a tool developed within ING wholesale banking advanced analytics to help its own bond traders make sharper prices in response to institutional investors’ request for quotes (RFQs).
Santiago Braje, global head of credit trading at ING, says: “We aimed to bring in real time all the information a trader might want before responding to an RFQ.
“Obviously, it’s important to have the recent history of prices in liquid bonds, but also it would be useful to combine that with internal data, for example what prices our traders may have previously quoted on the same bonds when that quote didn’t lead to a trade and by how much we may have lost out to the order that eventually went through.”
