HSBC and Terra Quantum are collaborating to explore applications of hybrid quantum technology in financial services. The partnership aims to tackle optimisation challenges, such as collateral optimisation, which involves efficiently allocating and managing collateral assets. Current methods can struggle with higher complexities, but quantum approaches could potentially handle high-dimensional optimisation problems more effectively. Terra Quantum’s hybrid quantum algorithms and solvers could offer a business advantage.
A McKinsey report suggests quantum computing could bring significant value to the financial services industry, potentially creating around $700 billion. Steve Suarez, founder and CEO of HorizonX, and Vishal Shete, Managing Director UK at Terra Quantum, expressed excitement about the project’s potential.
HSBC and Terra Quantum Collaborate on Quantum Technology in Financial Services
HSBC, a global banking and financial services organisation, and Terra Quantum, a quantum technology company based in Switzerland, have announced a partnership to explore the applications of hybrid quantum technology in solving optimisation challenges in the financial sector. As quantum technology continues to develop, early adopters such as HSBC are looking to leverage the potential benefits of increased efficiency, cost reduction, and gaining a competitive advantage. A report by McKinsey suggests that quantum computing could bring significant value to the financial services industry, potentially generating around $700 billion.
Steve Suarez, founder and CEO of HorizonX and an External Advisor at Bain & Company, who was previously the Global Head of Innovation, Global Functions at HSBC, expressed his excitement about working in the quantum space with companies like Terra Quantum. He highlighted the potential of hybrid quantum technology in tackling large-scale, business-critical problems and creating a transformative impact.
The Potential of Quantum Technology in Optimisation Challenges
The main goal of this project is to demonstrate the potential of a hybrid quantum solution in addressing optimisation challenges, which are common and highly complex issues in financial services. One such issue is collateral optimisation, a process that involves efficiently allocating and managing collateral assets to meet regulatory requirements while minimising costs. This process uses mathematical and algorithmic strategies to balance risks, liquidity, and profitability.
Current methods for collateral optimisation primarily depend on linear optimisation solvers, which can sometimes struggle when dealing with higher complexities. The quantum approach could potentially outperform traditional methodologies by effectively handling high-dimensional optimisation problems and offering better scalability.
Terra Quantum’s Hybrid Quantum Algorithms and Solvers
Terra Quantum offers a unique portfolio of hybrid quantum algorithms and solvers that allow customers to gain business advantage from the power of hybrid quantum technology. The company’s initial approach involves reformulating the problem as a Quadratic Unconstrained Integer Optimisation (QUIO) problem and applying its proprietary solver, TetraOpt. This tool functions as an enhanced search and optimisation tool that can handle higher dimensionality and non-linear constraints more effectively, thus optimising and increasing efficiency.
Markus Pflitsch, CEO and Chairman at Terra Quantum, stated that working with HSBC provides an opportunity to apply their advanced technology to real-world use cases at a major financial institution. He believes that hybrid quantum algorithms will revolutionise large-scale intractable optimisation tasks in the future.
Optimisation is a critical function for a bank’s healthy operation. With this collaboration, HSBC and Terra Quantum are at the forefront of developing revolutionary quantum capabilities in the financial sector.
Terra Quantum is a quantum technology company based in Switzerland. It offers “Quantum as a Service (QaaS)” in three core areas: “Quantum Algorithms as a Service,” “Quantum Computing as a Service,” and “Quantum Security as a Service.” With a unique approach to quantum technology, Terra Quantum provides access to an extensive library of quantum algorithms, high-performance simulated quantum processing units (QPU), and secure quantum and post-quantum communication solutions.
HSBC is one of the world’s largest banking and financial services organisations, serving more than 40 million customers worldwide through a network that covers 64 countries and territories. HSBC’s aim is to be where the growth is, connecting customers to opportunities, enabling businesses to thrive and economies to prosper, and ultimately helping people to fulfil their hopes and realise their ambitions.
“Steve Suarez, who is the founder and CEO of HorizonX as well as an External Advisor at Bain & Company and was until recently, the Global Head of Innovation, Global Functions at HSBC, said: “It’s been super exciting working in the quantum space with companies like Terra Quantum and its suite of cutting-edge hybrid quantum algorithms. Together we have explored the ability and readiness of hybrid quantum to take on large-scale, business critical problems and create transformational impact.”
“Vishal Shete, Managing Director UK at Terra Quantum, said, “Optimization of capital is one of the core functions in a bank. Quantum technologies have the potential to enhance optimization solutions across many parts of a financial institution, we look forward to realizing the benefits of this in the near-term future.”
“Markus Pflitsch, CEO and Chairman at Terra Quantum, “Working with HSBC allows us to apply our cutting-edge technology to real-world use cases at a world-class leading financial institution. Hybrid quantum algorithms will revolutionize large-scale intractable optimization tasks in the future. We want to demonstrate some of that potential already today.”
Quick Summary
HSBC and Terra Quantum are collaborating to explore the potential of hybrid quantum technology in tackling complex optimisation challenges in financial services, such as collateral optimisation. The quantum approach could potentially outperform traditional methods by effectively handling high-dimensional optimisation problems and offering better scalability.
- Terra Quantum, a Swiss quantum technology company, and HSBC, a global banking and financial services organisation, are collaborating to explore applications of hybrid quantum technology in financial services.
- The partnership aims to address optimisation challenges in the financial sector, such as collateral optimisation, which involves efficiently managing collateral assets to meet regulatory requirements while minimising costs.
- Current methods for collateral optimisation can struggle with higher complexities, but quantum technology could potentially handle high-dimensional optimisation problems more effectively and offer better scalability.
- Steve Suarez, founder and CEO of HorizonX and an External Advisor at Bain & Company, and Vishal Shete, Managing Director UK at Terra Quantum, have expressed excitement about the potential of hybrid quantum technology to tackle large-scale, business-critical problems.
- Terra Quantum’s approach involves reformulating the problem as a Quadratic Unconstrained Integer Optimisation problem and applying its proprietary solver, TetraOpt, which can handle higher dimensionality and non-linear constraints better.
- A McKinsey report suggests that quantum computing could bring significant value to the financial services industry, potentially creating around $700 billion.
- This collaboration positions HSBC and Terra Quantum at the forefront of developing quantum capabilities in the financial sector.