HSBC is collaborating with Terra Quantum to explore hybrid quantum technologies, potentially with an eye on applying it to collateral management and improving optimisation and better scalability.
Terra Quantum said in a statement: “As quantum technology evolves, early adopters like HSBC are poised to explore the potential benefits of increased efficiency, cost reduction, and a competitive edge.”
A Mckinsey report predicts that quantum computing may bring significant value to the financial services industry, with an estimated potential to create around $700 billion.
Terra Quantum added that the project’s objective is to demonstrate the potential for a hybrid quantum solution for optimisation challenges, a widespread and highly complex suite of issues in financial services.
One example of such an issue is collateral optimisation.
“Existing methods for collateral optimisation primarily rely on linear optimisation solvers, which can sometimes falter when confronted with higher complexities,” the technology outfit said.
“The quantum approach could potentially excel beyond traditional methodologies, by effectively handling high-dimensional optimisation problems and potentially better scalability.”
Vishal Shete, managing director UK at Terra Quantum, said “Optimisation of capital is one of the core functions in a bank, Quantum technologies have the potential to enhance optimisation solutions across many parts of a financial institution, we look forward to realising the benefits of this in the near-term future.”