Unlocking Predictive Power in Corporate Credit Markets
How Generali and Data Reply are pioneering Quantum-Inspired analytics for asset management.
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THE SCENARIO
Advancing Financial Systems with Quantum Innovation
In an increasingly complex and fast-moving financial landscape, Generali Asset Management S.p.A. Società di gestione del Risparmio (“GenAM”) — a leading European asset manager — sought to improve how it identifies and manages interdependencies across corporate bond portfolios. Traditional risk models often fail to detect the dynamic and non-linear relationships that emerge between issuers, especially in volatile or shifting markets. GenAM aimed to go beyond static correlation models and develop a predictive system capable of anticipating when and how inherently interconnected credit assets affect each other. This would allow risk and portfolio managers to detect concentration risks early and construct more resilient, diversified portfolios.
THE SOLUTION
Integrating QUBO and Machine Learning for Financial Efficiency
To address this challenge, GenAM partnered with Data Reply to develop an AI-powered system that applies quantum-inspired technologies to predict and visualise strong causal relationships between credit issuers. The solution is built around a hybrid approach that integrates machine learning, volatility modelling, and quantum-inspired optimisation, enabling the generation of predictive, data-driven asset networks.
The system combines GenAM’s expertise in financial modelling with Data Reply’s capabilities in optimisation and QUBO formulation. Specifically, GenAM contributed the GARJI model to process time series data and capture variations specific to financial signals, encoding them in a network structure.
This data is then translated — using a QUBO (Quadratic Unconstrained Binary Optimisation) formulation developed by Data Reply — into a graph of predictive dependencies. Leveraging MegaQUBO, Reply’s proprietary framework for large-scale quantum-inspired computation, the model identifies likely relationships between corporate bond issuers.
The result is a dynamic and interpretable network that offers risk and portfolio managers an intuitive view of how credit assets may influence one another over time. By anticipating potential contagion or clustering effects, the system supports better-informed portfolio construction and risk mitigation strategies. Its modular and scalable architecture ensures compatibility with evolving data inputs and use cases.
Quantum Impact on Financial Markets
The project demonstrates how quantum-inspired AI can enhance the depth and quality of financial insight. By enabling more precise identification of inter-issuer dependencies, the solution helps improve credit diversification and strengthens GenAM’s capacity to respond to market uncertainty. The tool has already been adopted in production use by GenAM’s investment team and is paving the way for broader applications of advanced AI in asset and risk management.
Part of Generali Investments, Generali Asset Management is a European investment specialist offering a wide range of active funds and tailor-made solutions in both public and private markets. Its investment expertise is based on a solid heritage, with skills that have been developed and refined over time by managing the assets of the Generali Group and those of external clients. Assets under management: €450 billion (as of 30 June 2025).
Data Reply is the Reply group company that offers excellence in Big Data and Artificial Intelligence services. Operating across most industries and business functions, we support executives and chief officers in extracting value from data. We build data platforms and define and implement ML and AI models in an efficient, replicable and scalable manner, through people with high skills in Big Data Engineering, Data Science and Intelligent Process Automation.