Lloyds Banking Group has completed what is believed to be the first-ever experiment using a live quantum computer to successfully identify a money mule, marking a significant advance in the financial sector’s exploration of next-generation fraud detection.
The nine-month project, conducted in collaboration with IBM, saw Lloyds specialists test quantum algorithms on anonymised transaction data. The system successfully pinpointed a real money mule account that had been deliberately hidden within the data, validating the potential for quantum computing to tackle complex, network-driven economic crime in the future.
Building an In-House Quantum Team
At the heart of the experiment is Lloyds’ growing internal expertise. The bank has established a working group of “Quantum Ambassadors” drawn from across the business, with qualifications in physics, mathematics, and computer science. This team worked alongside the bank’s economic crime prevention experts and IBM’s specialists over the project’s duration.
The technical work was executed on IBM’s Quantum Heron processor, a 156-qubit device, using 152 of its available qubits. The team tested multiple quantum algorithms designed to identify patterns of known money mule behaviour within a larger, complex graph of transactions—a task that grows exponentially more difficult for traditional computers as the network expands.
The Quantum Advantage in Fraud Detection
The experiment’s success hinges on the fundamental difference between quantum and classical computing. Traditional computers process information as bits, which are either a 0 or a 1. Quantum computers use qubits, which, by following the laws of quantum physics, can represent multiple states simultaneously.
This allows a quantum computer to assess all potential answers to a problem at the same time, homing in on the optimal solution. For the same large-scale problem—like analysing a vast, intricate web of transactions—a classical computer would need to solve each potential answer one after the other, a task so computationally intensive it could require more machines than exist on the planet.
It is this ability to navigate problems with exponentially growing variables that makes quantum computing a compelling prospect for analysing dynamic systems like financial networks, where subtle, complex fraud patterns can be easily hidden.
The broader financial industry is investing in this potential, believing quantum computing will become an invaluable tool. This aligns with a significant UK government push, including a £2.5 billion National Quantum Strategy and a recent £121 million investment announced in April 2025 specifically for using quantum technology to combat crime, fraud, and money laundering.
Other institutions are also exploring the field. IBM has collaborated with HSBC on quantum experiments, including trials in the European corporate bond market, while HSBC is also working with the UK’s National Quantum Computing Centre on anti-money laundering applications.
For Lloyds, quantum research forms part of a broader 2026 technology agenda targeting transformative fields like agentic AI and digital assets. The group already invests tens of millions annually in anti-fraud technology and has directed over £15 million of seized criminal funds into UK fraud prevention and victim support projects.
A Practical Step on a Long Road
While the experiment is a landmark, executives acknowledge the technology remains emergent. Ron van Kemenade, Chief Operating Officer at Lloyds Banking Group, stated: “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.”
Scott Crowder, Vice President of IBM Quantum Adoption and Business Development, echoed the forward-looking nature of the work. “Our collaboration with Lloyds Banking Group demonstrates how forward-looking financial organizations can begin conducting meaningful quantum research,” he said. Crowder leads IBM’s commercialisation efforts but acknowledges quantum computers are not yet broadly useful for society, with significant challenges remaining before widespread practical application. However, IBM believes a demonstrable “quantum advantage” over classical computers will be achieved in the near future.
