HSBC ramps up quantum computing exploration with Quantinuum partnership

HSBC adds new quantum computing partner as the race to deploy the tech heats up

HSBC has entered into a partnership with quantum computing company Quantinuum for a series of exploratory projects to investigate the potential near- and long-term benefits of quantum computing for banking.

The multi-year projects will focus on cybersecurity, fraud detection and natural language processing.

“Our collaboration with HSBC brings together a deep expertise in the application of quantum computing across a set of areas that are critical in global finance, such as protecting vital data and assets, management risk, and creating first-of-its-kind customer service approaches,” said Ilyas Kahn, chief product officer at Quantinuum.

In the initial exploration of the collaboration, the duo will explore the use of quantum computing-hardened cryptographic keys, including combining them with post-quantum cryptographic algorithms to mitigate current and future cyber threats.

HSBC and Quantinuum will run the latter’s commercial product Quantum Origin, a platform that uses quantum computers to strengthen the cryptographic keys, via a Hardware Security Module provider.

In the second part of the collaboration, HSBC and Quantinuum will research and explore the potential benefits of quantum machine learning (QML) for the bank.

Aimed at fraud detection, HSBC will team up with Quantinuum to use its software development platform, TKET, to examine QML techniques that are enhanced by qubit routing and circuit optimisation techniques.

The partnership will also explore the use cases for quantum natural language processing (QNLP), a language-based AI that uses an explainable model rather than the black box methods of traditional classical large-language models.

According to Quantinuum, QNLP will be based on training quantum states and processes that encode word meanings, potentially enabling native NLP tasks such as question answering or text similarity, which could be valuable in regulated markets dealing with customer data.

HSBC commits to quantum computing

HSBC’s partnership with Quantinuum continues its exploration of the potential use cases of quantum computing in its business.

In 2022, it signed a three-year collaboration deal with IBM to explore the technology’s potential use cases for pricing and portfolio optimisation to detect fraud, mitigate risk and advance its net zero goals.

That same year, HSBC also made a strategic investment in a second closing of Israeli quantum computing start-up Classiq’s $36m Series B round.

At the time of the investment, Steve Suarez, global head of innovation and global functions at HSBC, had stated that the technology had the potential to provide greater efficiencies and customer service improvements.

Quantum computing gains momentum with investments and successful experiments

The total capital invested in quantum computing start-ups reached an all-time high of $2.35bn in 2022, according to McKinsey.

The consultancy firm estimates that financial services will be one of the four industries most likely to see an impact first. By its projection, the value at stake with the incremental impact of quantum computing ranges from $394bn (lower estimate) to $700bn (upper estimate) by 2035.

IBM highlights feature selection, portfolio management, risk analysis, and fraud detection among the financial services activities that will potentially benefitting from quantum computing, with revenue potential exceeding $5bn.

Like HSBC, financial services have been actively exploring the potential use cases of quantum computing.

In November 2022, Crédit Mutuel partnered with IBM to explore the potential use cases of quantum computing on banking and insurance operations.

Credit Agricole announced a successful proof of concept using quantum computing at the start of 2023.

In partnership with Pasqal and Multiverse Computing.

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