Quantum Computing

To predict an event accurately, a quantum computer like a machine, which can process information at a gigantic scale is required.

Financial services and particularly banking services have many stakes in employing predictive intelligence. To achieve the right metrics in areas such as portfolio optimization, asset management, and lease management banks are actively looking forward to employing technologies such as artificial intelligence and machine learning. However, when it comes to predicting the right combination of financial tools or market trends, even the most advanced computers fail to perform. Finance & banking is one sector where zillions of factors work together for one event to happen. To accurately predict that event, a machine that can process information at a gigantic scale is required. This is where quantum computers come in. The qubits, the basic unit of quantum computing can exist in multiples states, i.e., 0 and 1 simultaneously, which enables calculating the probability of an event in a zillion number of circumstances within minutes. Quantum computing though is in its nascent stage of development, banking sector is fast adopting the technology to attain sustainability in its operations.

Capital optimization, which in general is calculated using the Monte Carlo method, uses a small set of parameters applied billions of times, only to get a small set of numbers as output. As asset portfolios are getting larger, computers need to process a large set of data. Quantum-inspired algorithms can process humongous data with precision and longer prediction periods, which are absolute requirements. Apart from asset management and portfolio optimization, the application of quantum computing in banking includes lease management, marketing optimization, digital experience of clients, etc.

One major challenge in quantum computers in banking remains to ensure watertight security. With their ability to break current public-key cryptography, there is a chance for escalation in online fraud, which currently is a thoroughly manageable scenario. For sure, this is not a kind of problem that can be resolved through enhanced investment in technology. The only way out seems to be to start early and find a suitable solution through experience and expertise.