Terra Quantum, a quantum technology firm, has partnered with HSBC to explore hybrid quantum technology applications in the financial services industry. This collaboration aims to capitalize on the potential benefits of increased efficiency, cost reduction, and gaining a competitive edge through quantum computing. According to a McKinsey report, quantum computing could create around $700 billion in value for the financial services industry.
Steve Suarez, the founder and CEO of HorizonX and an External Advisor at Bain & Company, highlighted the exciting opportunity to work with Terra Quantum and its suite of cutting-edge hybrid quantum algorithms. Their partnership has focused on assessing the ability of hybrid quantum to tackle large-scale, business critical problems and drive transformational impact.
The project’s main objective is to demonstrate the potential of hybrid quantum solutions for optimization challenges in financial services. One specific example is collateral optimization, which involves efficiently allocating and managing collateral assets to meet regulatory requirements while minimizing costs. Current methods for collateral optimization rely on linear optimization solvers, which can struggle with higher complexities. Quantum computing offers the potential to handle high-dimensional optimization problems more effectively and scale better than traditional approaches.
Vishal Shete, Managing Director UK at Terra Quantum, emphasized the importance of capital optimization in the banking sector and the potential of quantum technologies to enhance optimization solutions. Terra Quantum’s unique portfolio of hybrid quantum algorithms and solvers allows customers to leverage the power of hybrid quantum for business advantage right now. Their initial approach involves reformulating the problem as a Quadratic Unconstrained Integer Optimization problem and using their proprietary solver TetraOpt, which functions as an enhanced search and optimization tool. This approach can handle higher dimensionality and non-linear constraints better, leading to improved optimization and increased efficiency.
Markus Pflitsch, CEO and Chairman at Terra Quantum, expressed excitement about applying their cutting-edge technology to real-world use cases at a leading financial institution like HSBC. He stated that hybrid quantum algorithms will revolutionize large-scale optimization tasks in the future and that they aim to demonstrate some of that potential today.
By collaborating on this quantum technology venture, HSBC and Terra Quantum are at the forefront of developing revolutionary quantum capabilities in the financial sector. Optimization plays a crucial role in a bank’s healthy operation, and this partnership aims to leverage quantum technology to drive innovation and stay ahead in the industry.
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