The agreement will give the UK bank access to expertise and quantum computing systems.
The bank currently expects to apply quantum computing to pricing and portfolio management, risk and fraud detection and prevention, and will be used to support its environmental goals.
“HSBC will explore the use of quantum computing for pricing and portfolio optimisation, to advance its net-zero goals, and to mitigate risks, including identifying and addressing fraudulent activity,” said the bank in a statement.
As part of the agreement, HSBC will join IBM’s Quantum Accelerator programme, giving it access to IBM quantum computing systems. This includes its 127-qubit processor, Eagle. Using the skills and resources at IBM, HSBC will test out potential uses for quantum computers in its business.
“[Quantum computing] has the potential to transform how we run areas of the bank by addressing challenges which classical computers may never be able to solve alone,” said HSBC CEO Colin Bell. “Our work with IBM, a leading provider of quantum computing, is essential to harnessing this potentially game-changing technology for financial services.”
Quantum computers will be able to make calculations that traditional computers are fundamentally unable to do. If practical, they would mark a leap forward in computing capability far greater than that from the abacus to a modern computer.
Colin Bell, HSBC
Darío Gil, director of IBM Research, said: “Financial institutions and organisations around the world are eagerly awaiting real-world applications of quantum computing, and exploring industry applications for quantum computing should be a key tenet of any enterprise strategy today.”
Through the collaboration with IBM, HSBC will build a dedicated capability within its innovation team by training existing staff in quantum technology and recruiting quantum computing research scientists.
HSBC is not alone in exploring potential uses for quantum computing in the finance sector. A test done by Spanish bank BBVA in 2020 on the use of the technology for investment portfolio optimisation showed that it could be considerably faster when there are more than 100 variables in a calculation.
Meanwhile, Dutch bank ABN Amro is working with researchers to explore how the technology can be used to secure online banking. It is working with Delft University of Technology and the Netherlands Organisation for Applied Scientific Research to prove that quantum key distribution can be used to secure data traffic.
In the future, quantum computers will be able to crack encryption methods, so today’s security systems for internet and mobile banking will no longer be sufficient.
Five application areas for quantum computing
Drug and materials discovery: Untangling the complexity of molecular and chemical interactions leading to the discovery of medicines and materials.
Supply chain and logistics: Finding the optimal path across global systems for ultra-efficient logistics and supply chains, such as optimising fleet operations for deliveries during the holiday season.
Financial services: Finding ways to model financial data and isolating key global risk factors to make better investments.
Artificial intelligence (AI): Making facets of AI, such as machine learning, much more powerful when datasets can be too big, such as searching images or video.
Cloud security: Making cloud computing more secure by using the laws of quantum physics to enhance private data safety.