HSBC is about to become the first UK bank to test a data security system, which will connect two UK sites using quantum key distribution, a project being run by UK telecom company BT, Amazon’s AWS cloud and Toshiba.
HSBC will trial the quantum secure transmission of test data over fibre-optic cables between its global headquarters in Canary Wharf and a data centre in Berkshire, 62km away.
The transmission uses the fundamental properties of quantum physics to create secret keys between parties used to encrypt and decrypt sensitive data.
Financial institutions believe the technology could help defend against increasingly sophisticated cyber-attacks, protecting trillions of dollars.
It is believed that there will be a point when large-scale quantum computers will be so efficient at number crunching that it will be able to factorise the large prime numbers that make up our public encryption systems, also known as “Q-day”.
In other words, the most vital infrastructure, including bank accounts, could one day be compromised by quantum computing. However, HSBC is testing the technology that could become an important part of preventing these types of cyber-attacks.
“Our customers, clients and employees expect us to have safe and secure operations and resilient cybersecurity, so we must stay ahead of the curve,” said HSBC CEO Colin Bell.
“That is why we are already preparing our global operations for a quantum future. We are spearheading industry-leading trials, recruiting highly trained experts, and investing in strong, strategic partnerships to explore how we could deploy these technologies as they develop,” Bell added.
“Due to their vastly greater power, quantum computers could deliver extraordinary developments for banking in areas like risk analytics, machine learning and cybersecurity,” added Gustavo Ordonez-Sanz, head of economic capital analytics and global risk innovation lead, at HSBC.
“Most experts believe we are at least ten years away from commercially viable quantum computers for general purposes, although recent advances hint at potential breakthroughs sooner,” Ordonez-Sanz said.
Academics, experts and professionals in the tech sphere believe that fully realised quantum technology will usher in the fifth industrial revolution, transforming the ways businesses operate.
Financial markets currently use complex models to forecast returns based on Monte Carlo simulations – a type of computational and algorithm that utilises random sampling to predict possible outcomes of an uncertain occurrence.
Big Tech companies Microsoft, Amazon, IBM and Google have already began offering clients a cloud service for experimenting with quantum stimulators. By doing so, financial institutions can familiarise themselves with the emerging technology, they can also identify the most effective use cases for its services.
US tech giant IBM’s quantum accelerator programme was set up to allow its clients to find effective cases.
In fact, in March 2022, HSBC announced it would join the IBM Quantum Accelerator programme to progress potential quantum use cases in pricing and portfolio optimisation to advance its net-zero goals and to mitigate risks, including identifying and addressing fraudulent activity.
The collaboration includes knowledge transfer through internal training programmes, as well as actively recruiting quantum computing research scientists to build a dedicated capability within its innovation team.