Terra Quantum, a pioneering quantum technology company, and HSBC, a global banking giant, have announced an exciting collaboration aimed at exploring the applications of hybrid quantum technology to solve optimisation challenges in the financial industry.
As quantum technology continues to advance, early adopters like HSBC are eager to leverage its potential benefits, including increased efficiency, cost reduction, and gaining a competitive advantage. In fact, a recent McKinsey report estimates that quantum computing could generate approximately $700 billion in value for the financial services sector.
Rather than relying solely on traditional methods, which can sometimes struggle with complex optimisation problems, the collaboration between Terra Quantum and HSBC aims to demonstrate the potential of a hybrid quantum solution. One such optimisation challenge in the financial services industry is collateral optimisation, which involves strategically allocating and managing collateral assets to meet regulatory requirements while minimizing costs. This task requires balancing risks, liquidity, and profitability using mathematical and algorithmic strategies.
The quantum approach holds promise in tackling high-dimensional optimisation problems with potentially better scalability than traditional methodologies. The use of quantum algorithms to optimize complex systems could lead to significant advancements in the efficiency and effectiveness of financial institutions.
Vishal Shete, the Managing Director UK at Terra Quantum, expressed his optimism about the collaboration, stating that quantum technologies have the potential to enhance optimisation solutions across various parts of a financial institution. By leveraging their proprietary solver TetraOpt, which is specifically designed to handle higher dimensionality and non-linear constraints, Terra Quantum aims to optimize and increase efficiency in collateral allocation.
While this collaboration between Terra Quantum and HSBC focuses on optimisation challenges in the financial industry, it sets a precedent for the broader application of hybrid quantum technology in other sectors. As quantum technology continues to evolve, we can expect further advancements in solving complex problems and improving efficiency across various industries. Exciting times lie ahead as scientists, researchers, and industry leaders join forces to unlock the full potential of quantum computing.