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HSBC claimed quantum computing tools have made its trading more efficient in tests, marking a potential development for the emerging technology and its use in financial services.
Europe’s largest lender tested a tool developed by IBM on European corporate bond market data and found that the technology was 34 per cent better than traditional means in predicting how likely an order was to be filled.
“This is . . . our most tangible demonstration of just how close we are from extracting value from quantum computing,” Philip Intallura, HSBC group head of quantum technologies, said on Thursday.
While the results from the HSBC and IBM team are only theoretical and based on historic data, the findings suggest that quantum computing could have a significant impact on trading in over-the-counter markets without a centralised broker.
The data covered more than 1mn requests for quotes on over 5,000 bonds between September 2023 and October 2024. The published study warns that any conclusions lack “generalization guarantees to other market environments or trading datasets”.
The technology relies on quantum bits or qubits, the basic building blocks for quantum machines, which allows them to perform complex calculations at a much faster rate than traditional computers.
IBM is in a race with rival Google to produce an industrial scale quantum computer by the end of the decade. Quantum computing is believed to be able to drive breakthroughs in scientific research including drug discovery.
Experts are also concerned that the arrival of quantum computing would threaten common encryption techniques of sensitive data, including within financial institutions like banks.
“Quantum computing is a new branch of computation that uses the laws of quantum mechanics to represent and process information in a space that is exponentially more expansive and dynamic than what classical systems can access,” said Jay Gambetta, vice-president of IBM Quantum, in a statement.
Intallura added: “We have great confidence we are on the cusp of a new frontier of computing in financial services, rather than something that is far away in the future.”
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