Lloyds & IBM: Using Quantum Computing to Tackle Money Mules

Lloyds Banking Group has completed a nine-month experiment in collaboration with IBM which marks a significant step forward in the use of quantum computing to protect customers from financial crime.

The project, one of the largest of its kind ever conducted on real quantum hardware, focused on “detecting mule activity using graph analytics”.

By the end of the trial, the team successfully identified a real-world money mule that had been deliberately embedded within anonymised data, proving these next-generation machines can handle the complex networks of modern financial crime.

What is quantum computing?

To understand the breakthrough, it helps to understand the technology. 

While the laptop or smartphone you are using right now is a classical computer, quantum computers operate on a very different level.

Classical computers use binary bits, which are either on (1) or off (0). To solve a complex problem, they have to test every possible path one by one.

Quantum computers use qubits, which can exist in a state of 1, 0, or both at the same time.

For example, if you were trying to find the exit of a maze. A classical computer would try every path individually until it hits a dead end, then start over. A quantum computer effectively sees every path simultaneously, finding the exit much faster.

Tracking money mules

In finance, crime often involves ‘money mules’, which Lloyds Banking Group describes as “a person who lets someone else use their bank account to move money. Criminals recruit money mules to help turn the ‘dirty’ money they make from crime into ‘clean’ cash.”

Criminals hide this activity by weaving vast webs of transactions between thousands of different accounts. 

To a traditional computer, this is a computational challenge because the number of possible connections grows exponentially. It becomes a needle-in-a-haystack problem that is too complex for current systems to untangle efficiently.

“Economic crime prevention, particularly the detection of mule accounts, requires analysing highly complex networks of financial transactions,” write Jamie Harbour, Enterprise Architect for Emerging Technology & Innovation, and Adam Milner, Lead Quantum Ambassador, in a  Lloyds Banking Group article on ‘Exploring quantum computing at Lloyds Banking Group’.  

“These can be represented as graphs of customers, accounts and payments, where suspicious activity often hides in subtle network structures.

“Traditional computers struggle with certain classes of graph problems because the number of possible solutions grows exponentially with problem size, making them among the most challenging problems to solve using classical computation. 

“Quantum computing holds the potential to mitigate these limitations by exploring vast solution spaces more efficiently than classical hardware. 

“Our experiment did not aim to explore how to replace machine learning models currently used in fraud and crime prevention. Instead, it explored whether quantum enhanced techniques could one day generate more sophisticated graph-based features to support future models; features that might be too complex or expensive to compute classically.”

Quantum as a new partner for AI

The results of the Lloyds Banking Group-IBM trial suggest that quantum isn’t here to replace the tools we already use, like AI.

Instead, the experiment showed that selected quantum algorithms show “long-term promise”, according to Jame and Adam, particularly by “complementing machine learning by generating new types of features or enabling deeper network analysis”. 

While AI is excellent at spotting patterns in data it has already seen, quantum computing can generate “more sophisticated graph-based features to support future models; features that might be too complex or expensive to compute classically”.

Building the bank of the future

Beyond the technical results, the project has strengthened Lloyds Banking Group’s quantum readiness, building internal capability, partnerships and a clearer roadmap for future innovation.

The bank has established a Quantum Ambassador Programme, a team of internal experts with backgrounds in physics and math who are now “responsible for deepening expertise” and “helping to grow a thriving internal quantum community”.

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

“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.”

What’s next?

Though quantum technology is still in its early stages, the success of this nine-month journey with IBM proves that the foundations are being laid. 

By “preparing our workforce with the skills needed for future adoption,” Lloyds Banking Group is ensuring that as the technology matures, it will be ready to use it to create a safer, more precise shield against financial crime.

Scott Crowder, Vice President of IBM Quantum Adoption and Business Development, says: “Our collaboration with Lloyds Banking Group demonstrates how forward-looking financial organisations 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.”