While quantum computing is yet to reach critical mass in finance, expect its arrival in the near future. The predicted supercomputing-level technology horsepower offers the promise to optimize multiple back-end fintech processes, improving operational efficiency. Any IT professional working at a financial services institution needs to pay attention to the adoption of quantum technology. Let’s examine the predicted influence of quantum supercomputing on the financial sector over the next decade and beyond. When combined with AI and machine learning, the possibilities for improved operations become even more promising. Everything from portfolio management to risk analysis stands to benefit from applications leveraging quantum technology. Let’s explore some of these future use cases.
Exploring the Applications for Quantum Technology in Finance
As highlighted above, the high speeds of quantum computing truly empower AI and machine learning models. More effective risk modeling, fraud detection, and portfolio management are some of the likely benefits to financial institutions. While artificial intelligence is currently used for these purposes, the high-end processing power outstrips the capabilities of current servers. Quantum computing simply changes that equation for the better. Quantum tech also offers significant benefits to cybersecurity and data privacy in financial applications and communications. Emerging concepts like quantum random number generation (QRNG) and quantum key distribution (QKD) offer essentially unbreakable encryption. Expect them to help the adoption of distributed ledger technology, better known as blockchain. Additionally, a concept known as quantum sensing offers the potential to synchronize the high-frequency trading algorithms currently in use. However, fintech pundits predict quantum sensing to follow the previous two technologies in adoption rate. This isn’t surprising considering the current nascent state of quantum technology. Quantum sensing still squarely resides in the experimental state.
The World Economic Forum forecasts the Adoption of Quantum Computing in Fintech
A recent report from the World Economic Forum analyzes the potential impact of these quantum technologies. It notes that most of these emerging concepts are still in the pilot stage. Still, they highlight the fact that case studies from Santander and Yapi Kredi show significant promise. However, the study comments that “to derive meaningful value from quantum technologies, financial institutions will need to go beyond experimentation and pilot phases.” Widespread adoption ultimately requires focused research & development investments as well as workforce education and development. Fintech professionals need to pay close attention to the commercialization of quantum technology. It’s an area potentially offering meaningful competitive benefits to early adopters. As one of the top FinTech consulting agencies, we are happy to discuss quantum computing and your organizations needs. Schedule some time with us at your earliest convenience.
