Lloyds Banking Group conducted an experiment that focused on money mule networks, a significant enabler of scams and fraud, where criminal behaviour is hidden within vast webs of legitimate transactions. Insights from this work could one day help banks detect sophisticated fraud earlier, using cutting-edge technology to better protect customers from fraud.

At the centre of the project is Lloyds’ growing internal quantum capabilities, including a new working group of Quantum Ambassadors drawn from across the business, with qualifications in physics, maths and computer science. Over the nine-month project, this team worked alongside Lloyds’ economic crime prevention experts and IBM’s specialists to explore how quantum computing could one day help uncover complex fraud patterns that can be challenging for traditional computers to detect.

What was the experiment?

The experiment tested multiple quantum algorithms to see whether patterns of known money mule behaviour could be identified within a larger transactional graph. The team used anonymised data on one of IBM’s 156-qubit quantum computers.

The solution successfully identified a real money mule that had been deliberately embedded in the data to validate the approach, demonstrating how real-world financial crime challenges could be tackled in the future using algorithms running on quantum computers.

Ron van Kemenade, chief operating officer at Lloyds Banking Group, said: “Financial crime is becoming more complex and more network‑driven, which means we need to keep pushing the boundaries of technology to protect customers.

“While quantum computing is still emerging, this experiment has allowed us to translate research into practical insights, while building a strong internal community of quantum experts that will continue to explore future use cases and applications as the technology evolves.”

Scott Crowder, vice president of IBM Quantum Adoption and Business Development, said: “Our collaboration with Lloyds Banking Group demonstrates how forward-looking financial organizations can begin conducting meaningful quantum research.

“Over the past nine months, Lloyds worked alongside IBM’s quantum computing experts to test how quantum algorithms could help identify patterns within complex transaction networks and combat evolving forms of economic crime.

“IBM is excited to continue collaborating with financial institutions like Lloyds and further explore how quantum computing could support the future of financial services.”

What is quantum computing?

Traditional computers process information as bits that are either a 0 or a 1. Quantum computers use qubits, which follow the rules of quantum physics and allow systems to represent many states simultaneously.

As a result, a quantum computer can perform certain computations beyond the capabilities of a traditional computer (also known as classical computers).

Quantum Computers can take a problem and assess all the potential answers at the same time, homing in on the best answer. For the same problem, a classical computer would need to actually solve each potential answer, one after the other which, for large scale problems of this nature, could require more computers than exist on the planet.

This is why quantum computing is being explored for problems involving complex and dynamic systems with many interacting variables, such as analysing large transaction networks where the number of possible patterns grows exponentially.

Read more about quantum computing and financial services here: https://www.lloydsbankinggroup.com/insights/what-is-quantum-computing-and-how-might-it-impact-financial-services.html