Given that nature behaves quantum mechanically, quantum computing gives us the best possible chance of understanding and simulating the natural world at the molecular level. With this breakthrough we’re now one step closer to applying quantum computing to—for example—design more efficient batteries, create fertilizer using less energy, and figure out what molecules might make effective medicines.Sundar Pichai, CEO, Google
Google has recently announced that it has achieved a significant milestone in Quantum Computing (QC), known as Quantum Supremacy. It is a term used to indicate that they have used a quantum computer to solve a problem that would take a classical computer an impractically extended amount of time. According to a blog published by Google’s CEO Sundar Pichai, the team has used a 53-qubit (the quantum version of the classical binary bit for storing information) quantum machine to perform a test computation in just 200 seconds, versus an estimated time of 10,000 years for the world’s fastest supercomputer. IBM disputes Google’s claim and argues that an ideal simulation of the same task can be performed on a classical system in 2.5 days and with far higher fidelity. But still, Google’s achievement is a landmark scientific achievement that promises exciting opportunities with quantum computing.
There are significant investments in developing practical quantum machines – both by research institutes as well as corporates. D-Wave Systems, a Canadian company, launched commercial quantum computers in 2011 to solve optimization problems. Microsoft has been working on a qubit technology called topological qubit that aims to push boundaries of computing. It has announced Azure Quantum – a diverse set of quantum services, ranging from pre-built solutions to software and quantum hardware, providing developers and customers access to some of the most competitive quantum offerings on the market. Rigetti Computing, a California-based startup, launched Quantum Cloud Services. According to IBM, several IBM quantum devices are available to the public through our quantum cloud services. Users can access devices for free through the IBM Q Experience or Qiskit, and more advanced quantum systems are available to our clients in the IBM Q Network. Other notable efforts in building quantum computing capabilities include Intel’s Quantum Processor, Honeywell’s Quantum Solutions, etc.
There is a growing interest from financial services companies in using quantum computing capabilities. NatWest is trying quantum computers to solve highly complex calculations; JPMorgan Chase has partnered with IBM to build quantum culture; Barclays and IBM researchers have recently published a paper on a quantum computing algorithm for securities transaction trading.
It’s just the beginning of the quantum computing era. Classical Computers (CC) are not going away any time soon. But QCs will have an enormous impact with newer possibilities and solutions in various fields, including life sciences, medicine, manufacturing, material sciences, logistics, and of course, own industry – financial services. They help simulate, predict, and solve complex problems that require a large scale of computations. The computing power of a QC doubles with every additional qubit resulting in exponential scaling, which contrasts with classical computing, where every additional bit just adds incremental computing capacity. As we understand today, while QCs offer better performance than Classical Computers in certain areas, they still lag behind CCs in some other areas.
According to Everest Group, here are the potential use cases of quantum computing in Banking and Financial Services:
- Portfolio analysis and optimization
- Fraud detection and proactive fraud risk management
- Advanced optimization
- Generating next generation cryptography
- High frequency trading
- Asset valuations
- Clustering and advanced pattern discovery