Toshiba and HSBC pioneer quantum protection for AI-powered FX trading

The financial services industry protects some of the world’s most sensitive data. Yet, while its security measures are leading by today’s standards, the advent of quantum computers threatens to render current encryption methods obsolete. 

This presents a significant problem for the banking sector. Almost every aspect of our financial system has been digitised, from the customers managing their money right up to large transactions between organisations and nations. This means that for banks to fulfil their role as lynchpins of modern society, security is paramount, especially with experts predicting that the impact of a quantum hack across major banks and the wider financial sector could lead to a decline in annual real GDP.

Predictions of when quantum computers will be able to break current encryption methods vary. For example, Dr Kristin Gilkes, global innovation quantum leader at EY, says many experts in the industry believe the chances of this happening before 2030 is over 50%. Forrester estimates that within 5-15 years quantum computing will make current protection methods wholly or at least partially unusable.   

In any case, it’s important organisations start preparing now. An effective transition to a quantum-safe infrastructure is a complex process likely to last several years, especially for large, global organisations. Furthermore, the threat of ‘harvest now, decrypt later’ attacks, where hackers acquire and store encrypted data today with the aim of decrypting it once quantum capabilities mature, highlight the importance of acting early.

That’s why forward-thinking organisations – like HSBC – are taking action now to secure themselves against the future threat posed by quantum computing.

Partnering with Toshiba

HSBC processes billions of financial transactions each year for its customers, meaning the importance of securing its infrastructure from the rise of quantum is paramount.

In 2023, HSBC partnered with BT and Toshiba to become the first bank to join the London commercial quantum secure network (QSMN) to trial a real-life deployment of Quantum Key Distribution (QKD) technology. Building upon this success, HSBC, one of the world’s largest FX trading providers, pioneered quantum protection for AI-powered FX trading in a world-first trial.

“We are on the cusp of a quantum revolution; as the technology continues to evolve, so too does the emerging risk,” says Philip Intallura, Global Head of Quantum Technologies at HSBC. “As part of our strategy to align to real-world scenarios, it made sense to test quantum protection on something as business critical as FX Trading.”

The Quantum Secure Metro Network

The trial

For the experiment, a link was established between HSBC’s HQ in Canary Wharf and a data centre in Berkshire on the QSMN.

The QSMN itself is secured by Toshiba’s Quantum Key Distribution technology, which uses the physical properties of light to prevent any unauthorised party from gaining information on the encryption keys. In the QKD protocol used in the QSMN, individual photons are transmitted across the network, delivering quantum-secure encryption keys that cannot be compromised by a quantum attack. These keys are used to encrypt and protect sensitive data.

In a world first, HSBC secured its AI Markets trading terminal using Quantum Key Distribution and safeguarded the exchange of €30 million to US dollars. AI Markets is HSBC’s award-winning offering that uses the power of natural language processing (NLP) and machine learning (ML) to enhance traders’ ability to analyse and interpret financial markets.

The experiment helped HSBC to better understand the practical steps involved in implementing QKD, including the underlying business processes.

“I‘m pleased to see the success of this partnership in testing a real quantum solution on a real-world use case” said Intallura. “Together with Post Quantum Cryptography, QKD is an important part of our portfolio of work towards a quantum safe future.”

Continuation of Toshiba’s commercial success

Toshiba’s journey in quantum secure communications has been characterised by a series of world firsts in QKD development and deployment – our work with HSBC is a continuation of the success we’ve enjoyed in commercial trials of QKD technology.

With the opening of our £20 million UK Quantum Technology centre last year, we are dedicated to the commercialisation of these technologies and how they apply to the real world.