Terra Quantum, a St. Gallen-based quantum as a service firm, and global banking institution HSBC have today announced a collaboration that will see the two investigate the application of hybrid quantum technologies applications.
In addition to the increased efficiency, cost savings, and competitive advantages that quantum services stand to bring to the financial sector, according to a McKinsey report, the overall impact stands to create anywhere between $394 billion and $700 billion by 2035.
While HSBC may be pushing boundaries with the application of quantum technologies, that still doesn’t remove it from the very traditional sector of finance, one that’s historically been plagued by optimisation challenges. Herein lies the first challenge for the collaboration.
Managing Director UK at Terra Quantum Vishal Shete comments:
“Optimisation of capital is one of the core functions in a bank, Quantum technologies have the potential to enhance optimisation solutions across many parts of a financial institution, we look forward to realising the benefits of this in the near term future”.
To put this into perspective, Terra Quantum reports that they've demonstrated a 6-basis point improvement in collateral optimisation with a major European bank that posted about €400 billion in collateral. By utilising Terra's optimisation, this translates to a healthy return of around €240 million for the bank.
Lead image: Cheung Yin