Quantum Computing for Finance

Posted on October 29, 2018 by Editor

IBM Research’s Dr. Anna Phan demonstrated how quantum computing’s power could be transformational for the financial industry at Sibos this week.

The world is gathering increasingly vast banks of complex, varied machine-readable data, and technological advances are only making this quicker, cheaper and more efficient. But what can we do with all this data?

Quantum computing is a completely different computing paradigm – reimagining what it means to compute. The difference between our computers today and quantum computers is analogous to the difference between driving and flying, a step from 2D to 3D movement that proves transformational.

The vastly greater computing power of quantum computers will eventually allow complex interactions and vast data sets to be analysed at a fraction of the time and computational costs of today

In the use of Monte Carlo sampling, for example: With today’s computers, understanding the properties of financial instruments via sampling requires millions of samples, with analysis run overnight on clusters of computers. Quantum computing could reduce the samples required for accuracy by 2 orders of magnitude, the difference between 1 million samples and 10,000. This opens up the possibility of running relatively accurate stock market simulations in near real time.

Quantum machine learning may one day provide the tools to utilise our growing data quantity, variety and complexity, as quantum computers could sift through patterns in past data. One use could be in classification problems – for example, determining where to draw the line between credit worthy and risky customers. Quantum computing should allow analysis of a range of complicated interactions that today are simply too difficult to take into consideration.

While this is speculative and around 20 years away at least, IBM has built a tool to allow people to experiment with quantum computing today. Using a simple drag and drop interface, the IBM Q is a chance to experiment with and perhaps shape the practical applications of this potentially transformational technology:  One to watch…

Listen to the presentation in full here.

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