HSBC, the eighth largest bank globally, is collaborating with Amazon Web Services, BT (formerly British Telecom), and Toshiba to conduct trials and experiments utilizing quantum encryption technology. This partnership makes HSBC the first bank to commit to trials on the new quantum “metro” network in the United Kingdom, which aims to establish a secure transaction system using unbreakable encryption through quantum cryptography.
The quantum metro network, developed by Toshiba in partnership with telecom giant BT, enables institutions to engage in unconditionally secure transactions. HSBC will leverage this network to trial various use cases, including financial transactions, video calls, and edge computing. One specific application HSBC will experiment with is “quantum key distribution” (QKD), which allows secure communication between two parties separated by distance.
QKD involves generating unique encryption keys for both parties simultaneously. Due to the phenomena known as “spooky action at a distance” in quantum physics, the states of quantum data collapse when measured, making it impenetrable to external parties attempting to view or intercept the information. Any tampering with equipped transactions would be instantly detectable by both parties involved.
However, there are limitations regarding the distance QKDs can be sent due to the inherent properties of quantum data. Unlike classical data transmitted through fiber optics, quantum data cannot be easily boosted, resulting in exponential loss during transmission. While researchers in China recently achieved a world record by successfully sending QKDs across 1,000 kilometers of fiber optic cable, solutions to overcome these limitations are still in the early stages of development.
In the case of HSBC’s trials on the BT-Toshiba metro network, the tests will cover a distance of 62 kilometers of fiber optic cables connecting HSBC’s global headquarters in Canary Wharf to a data center in Berkshire. This shorter distance allows the bank to evaluate the effectiveness and security of the quantum encryption technology in a controlled environment.
By participating in these trials, HSBC aims to explore the potential benefits of quantum technology for enhancing financial transactions, communication, and data security. The collaboration between HSBC, Amazon Web Services, BT, and Toshiba marks an important step toward establishing quantum-safe networks in the banking sector, which could have significant implications for the future of secure financial transactions.