A pioneering trial in algorithmic bond trading has shown that quantum computing can deliver significant advantages, with a 34% boost in prediction accuracy. Working alongside IBM, HSBC tested a hybrid system combining classical methods with quantum processors, outperforming traditional approaches.
The study centred on over-the-counter bond markets, where trades are carried out directly between parties without a central exchange. Here, algorithms are used to assess the probability that a quoted price will be met, a calculation that becomes more challenging due to the complexity of real-time market conditions. HSBC’s experiment validated its approach using production-level European bond trading data on IBM’s quantum systems.
HSBC highlighted that in a live trading environment, this improvement would translate to more efficient algorithms and increased trading profitability.
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HSBC’s Group Head of Quantum Technologies, Philip Intallura, described the trial as a “world-first” and stressed that quantum computing is no longer a distant promise but a practical tool with immediate applications.
We now have a tangible example of how today’s quantum computers could solve a real-world business problem at scale and offer a competitive edge, which will only continue to grow as quantum computers advance.
Philip Intallura, HSBC’s Group Head of Quantum Technologies Jay Gambetta, IBM Quantum Vice President, added that combining quantum algorithms with deep financial expertise demonstrates how current quantum hardware can already be applied to real-world data.
Such work is essential to unlock new algorithms and applications that are poised to transform industries as quantum computers scale, and the future of computing takes shape.
Jay Gambetta, Vice President IBM Quantum IBM’s Heron quantum processor, the hardware behind the experiment, has already been deployed through IBM’s cloud-based platform and supported by the Qiskit software stack. HSBC has also been expanding its quantum partnerships beyond IBM, including collaborations with Quantinuum, a competitor majority-owned by Honeywell.
The findings reinforce the idea that financial services could be one of the earliest industries to benefit from the growing maturity of quantum computing.
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