AI model is better at pricing currencies than humans, says ING

AI model is better at pricing currencies than humans, says ING is profiled by BTW Media because published evidence links it to internet infrastructure, governance, operational dependencies, or market visibility.

• ING’s AI currency pricing model outperforms human traders, improving efficiency in the $7.5 trillion-a-day global foreign exchange market.
• Despite the advances in AI, ING maintains human oversight, allowing traders to intervene when the AI model encounters problems.

OUR TAKE
ING Groep NV, a Dutch multinational banking and financial services company, has introduced a new AI model using reinforcement learning to handle currency pricing, which has traditionally been done by human traders. The model has shown it can do the job much more efficiently and accurately than humans. This shows how the financial sector is moving towards AI-powered solutions to make processes more efficient and cut costs. However, there are still concerns about keeping a close eye on AI in case it malfunctions.
–Heidi Luo, BTW reporter

What happened

ING Groep NV has recently implemented an artificial intelligence system to take over the task of pricing currencies, a task previously performed manually by its traders. The AI model uses reinforcement learning, which mimics human trial-and-error processes, to adapt to market fluctuations and make better pricing decisions.

According to Simon Bevan, ING’s global head of electronic trading, this advancement has improved performance, surpassing the capabilities of human traders and freeing up a full-time position previously dedicated to this task.

The introduction of the AI model is part of ING’s broader strategy to use technology to improve efficiency and competitiveness in the global FX market. ING recruited James Robinson, a machine learning expert from UBS Group AG’s FX trading team, to lead the development, which took three months to build and six weeks to test. The success of this AI model has encouraged ING to explore further AI applications in other asset classes.

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Why it’s important

The integration of AI into financial markets reflects a growing trend, where machine learning models are increasingly being used to optimise trading and pricing decisions.

ING’s success with AI-driven currency pricing not only demonstrates how technology can improve efficiency, but also highlights the need for human oversight to ensure safety and accountability. As AI becomes more prominent in global markets, concerns about over-reliance on machines remain.

Simon Bevan has assured that human traders will still be present to monitor the AI model and intervene if necessary. This balanced approach allows ING to reap the benefits of AI while maintaining safeguards against potential system failures.

According to Kimiya Minoukadeh, Global Head of Quant Trading at ING, these AI algorithms have broad applications across financial markets, suggesting that AI will play an increasingly important role in asset management in the coming years.