HSBC Paves the Way for Quantum Computing in European Bond Trading

The British major bank HSBC has tested the potential of quantum computing in the European corporate bond market, achieving a global first. Together with a team from IBM, HSBC achieved an impressive 34% improvement in predicting the likelihood of a bond being traded at a certain price. Should this technology be established, it could help banks and investment firms evaluate bonds and other assets more accurately. Philip Intallura, Head of Quantum Technologies at HSBC, emphasized that this is a groundbreaking step in bond trading. Quantum computers could thus solve real business problems on a large scale, offering a competitive advantage that will grow with the advancements of quantum computers. Unlike classical supercomputers, quantum computing uses principles of quantum mechanics to process information and solve complex problems inaccessible to conventional computers. Thus far, the technology has mainly been used in research laboratories; this is the first time it has been applied in financial trading. For the test, IBM's most advanced quantum processor, known as Heron, was used to supplement HSBC’s existing systems. Hidden patterns in the extensive bond market data could be discovered, yielding better results than with conventional computers. The technology shows potential to process customer inquiries faster, adapt to rapidly changing trading conditions, and predict whether a bond trade at a given price will be successful, considering real-time market data and risk assessments. HSBC described the test as promising, with the prospect of optimizing bond trading through quantum computers, especially in "Requests for Quote" in over-the-counter markets, where financial assets such as bonds are traded directly between two parties. The bank is confident that the application of quantum technology is feasible in the near future.