①HSBC Group has partnered with IBM to optimize bond trading using quantum computers, which can increase the probability of trades being executed at quoted prices by up to 34%; ②Quantum computing holds broad application prospects in the financial sector, with major financial institutions such as JPMorgan, Goldman Sachs, and Citi increasing their investments in this area.
Cailian Press reported on September 25 (edited by Zhao Hao) that HSBC Group announced a world-first breakthrough in its exploration of optimizing bond trading through quantum computing experiments, demonstrating the potential value of this cutting-edge technology in solving real-world problems.
On Thursday (September 25), HSBC released a press release on its official website stating that during its collaboration with the IBM team, the bank adopted a hybrid approach combining quantum and classical computing resources. Compared to commonly used traditional technologies in the industry, this method increased the probability of predicting trades being executed at quoted prices by up to 34%.
Source: HSBC’s official website
HSBC mentioned that the bank used IBM’s most advanced quantum processor, ‘Heron,’ which can enhance traditional computing workflows. It outperformed HSBC’s standard, conventional methods in identifying hidden pricing signals within noisy market data, thereby improving the bond trading process.
Philip Intallura, Head of Quantum Technology at HSBC, stated, “This represents a pioneering global first in the field of bond trading. It means that we now have a tangible example showcasing how quantum computers can solve large-scale real-world commercial problems and provide competitive advantages.”
Intallura noted that although their trial was not conducted in live trading, it served as a real-world demonstration. “We are highly confident that we are on the cusp of a new era of quantum computing in financial services, rather than waiting for a distant future,” he added.
Josh Freeland, Director of Algorithmic Credit Trading at HSBC, said that during one phase of the experiment, a team of 16 experts in physics, machine learning, and artificial intelligence worked around the clock trying to replicate the results achieved by the quantum computer.
“We are always looking for single-digit improvements because when such improvements are repeated tens of thousands of times daily, they can truly make a significant impact,” Freeland explained. “If we could achieve such results every day, it would be quite remarkable.”
Media analysis indicates that so far, quantum computing has mostly remained within academic research and specialized tech companies. Although large-scale applications remain far off, competition is intensifying as some Wall Street firms accelerate efforts to incorporate this technology into their daily operations.
Consulting firms such as McKinsey and KPMG have stated that quantum computing can significantly enhance banks’ capabilities in risk management, portfolio optimization, fraud detection, and asset price prediction across various market scenarios.
In addition to HSBC, financial giants such as JPMorgan, Goldman Sachs, and Citi are also increasing their investments in this field due to its highly attractive potential returns.
Research published by McKinsey in June this year forecasts that revenue from quantum computing will soar to as much as USD 72 billion within a decade, compared to approximately USD 4 billion last year, driven primarily by developments in industries such as chemicals, life sciences, and finance.
Henning Soller, a Frankfurt-based partner at McKinsey and the global leader of quantum technology research, stated that for banks, this technology can deliver significant benefits, making even a one-percentage-point improvement in price prediction highly meaningful.
Miklos Dietz, a senior executive at McKinsey, commented, “If one bank pioneers the use of quantum computing to develop a program, other banks will start developing it the very next day. They will work around the clock until they acquire it. When it arrives, it will be explosive.”
Notably, other banks have also made breakthroughs in the field of quantum computing. For example, in March this year, JPMorgan announced that it had used a quantum computer to generate and certify so-called ‘true random numbers,’ a development with promising applications in encryption, security, and trading.