HSBC is celebrating the successful results from trials conducted in partnership with IBM, which examined the potential of current quantum computing technology for algorithmic trading in the bond market.
Algorithmic trading in the corporate bond sector employs sophisticated computer models to rapidly and efficiently price customer inquiries during competitive bidding processes. HSBC collaborated with IBM to leverage quantum computing resources, achieving enhancements of up to 34% in predicting the likelihood of trade fulfillment at quoted prices, compared to traditional classical computing methods.
The trial focused on optimizing requests for quotes in over-the-counter (OTC) markets, where financial assets like bonds are exchanged directly between parties, bypassing centralized exchanges or brokers. IBM’s Heron platform played a crucial role by enhancing classical computing workflows to uncover hidden pricing signals within noisy market data.
Both teams validated actual trading data at scale across multiple IBM quantum computers, demonstrating significant improvements in the prediction of winning customer inquiries.
Philip Intallura, HSBC’s Group Head of Quantum Technologies, stated, “This marks a groundbreaking first in bond trading. We now have a clear example of how contemporary quantum computers can address real-world business challenges at scale, providing a competitive advantage that will expand as quantum technology progresses.”
He further emphasized HSBC’s commitment to the near-term application of quantum technology, expressing confidence that the successful trial results signal a new era in financial computing, rather than a distant possibility.
HSBC is actively delving into quantum computing, testing its capabilities in sectors like digital gold markets, payments, and foreign exchange.