How AI is Being Used at Investment Banks – Predictive Analysis

As part of our coverage on the use of AI in finance, CFTE takes a look and examines the impact of implementing such disruptive technology on various industry verticals. 

Although artificial intelligence is often linked with automating jobs, its potential as a tool to enhance human decisions and strategy-making has seen it being used in predictive analysis within investment banking.  One such example is the Dutch bank ING launching a tool named Katana back in 2017.

The aim of Katana is to use “predictive analytics to help traders decide what price to quote when buying and selling bonds for their clients”, with this analysis performed based on real-time and historical data. Algorithms used by AI and machine learning will pick up on patterns in both sets of data, in a bid to “enhance cooperation between man and machine” according to Santiago Braje, Managing Director of ING and Global Head of Credit Trading.

Initial results of testing Katana yielded quicker pricing decisions for about 90% of all trades, while reducing trading cost by 25%. More interestingly, traders could offer their clients the best price available four times more frequently than before, which is perhaps the most crucial metric of the tool’s success.

This ties in with the words of Matt Davey of Societe Generale Security Services, who states in the CFTE AI in Finance course that “AI is going to have a huge impact not just on finance, but on all businesses” due to the “cost benefits”.

The use of Katana further emphasises how AI and machine learning is not going to take jobs or replace humans in the workplace, but rather enhance how we do our jobs and ultimately provide better services to all parties.

About the AI in Finance programme

The CFTE AI in Finance course has been developed in partnership with Ngee Ann Polytechnic, a leading institute of higher learning in Singapore and features high-quality content taught by five senior lecturers and 18 industry experts.

With an easy to follow format, the course is perfect for busy professionals to understand the technologies behind AI and machine learning that are disrupting finance.

Click here to learn more about the CFTE AI in Finance course.

About CFTE

We are a platform supported by senior leaders from the largest institutions, startups and universities. We address the needs of professionals in finance to upskill in a rapidly changing industry being transformed by emerging technologies. More than 50,000 participants learn from our online courses, such as AI in Finance, Fintech Foundation or Extrapreneurship, a mini-MBA with fast growing startups such as Revolut or Shift Technology.


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