Financial services firms can create billions in value long before fault-tolerant quantum computers become widespread by learning, developing capabilities and streamlining business processes to facilitate rapid integration – this includes improving risk management strategies and investing strategies while creating AI algorithms.
Vigilance must be combined with visioning. Managers must evaluate any retroactive risks and prepare to migrate any cryptographic algorithms which are susceptible to quantum computing.
Quantum-based simulations
Many firms are making plans to leverage quantum computing technology for improved performance in various financial activities, including optimization systems, simulation systems and risk management. Although its benefits are obvious, these technologies also present new risks such as cyber risk; so it is imperative that firms learn about them.
Quantum computers can help firms speed up the calculation of complex models used for risk assessments, which allows them to better understand market activity and enhance decision-making processes. Furthermore, this technology enables faster and more accurate modeling of climate and environmental impact assessments.
However, quantum simulations may still be too early for seamless financial transactions. Current quantum technology can be noisy and unreliable; scientists will take time to develop improvements. Still, financial industry should start planning for quantum finance by increasing capital investments and patent filings related to hardware.
Quantum-based optimization
Quantum computing is revolutionizing how financial institutions perform calculations. One of its primary uses is in optimization, enabling companies to run risk management simulations with increased accuracy and speed – an advantage particularly beneficial in trading and portfolio management, where combinatorial optimization problems scale exponentially.
Quantum processors take advantage of quantum entanglement to perform complex operations simultaneously and more accurately calculate probabilities, an intensive task which normally requires large amounts of processing power. Google’s quantum processor recently completed this task in just three minutes whereas it would have taken classical computers many thousands of years.
Quantum computers outperform conventional computers in machine learning tasks that take time to learn (quantum speedup). This could enable them to help improve credit scoring and detect fraud more accurately. Financial services organizations could gain considerable value from studying quantum computing technologies and developing capabilities around them; these efforts may accelerate integration when full-scale fault-tolerant quantum machines become reality.
Quantum-based security
As quantum computing develops, it presents a serious threat to existing cybersecurity measures. Quantum computers are capable of breaking certain types of encryption like RSA that underlies most online communications today – leading many companies to invest in quantum-enhanced security for telecom systems.
Researchers are exploring new methods of encryption that would make data unbreakable by quantum computers, but these technologies may not yet be ready for commercial market adoption. As a result, cybersecurity professionals must stay apprised of all developments related to quantum technologies in order to safeguard their organizations against quantum hacking attacks.
NIST has recently initiated a multiyear competition to identify and standardize quantum-safe cryptographic algorithms that use specific mathematical formulae that are theoretically resistant to quantum attacks, and provide an additional layer of security against quantum computing threats in critical infrastructure and government networks.
Quantum-based fraud detection
Financial sectors are becoming more vulnerable to fraud, necessitating new methods for detection and mitigation. Quantum computing provides an innovative solution, as its powerful calculations could complete calculations which traditional computers would struggle with efficiently.
Quantum computers use qubits – bits that exist in multiple states simultaneously – instead of binary digits to process information faster and with greater accuracy. Quantum neural networks can help detect patterns in transactional data that would otherwise be difficult to recognize using traditional models.
QCi’s EQC system is purpose built to address real business challenges, from customer targeting and prediction modeling, fraud detection, to more. Rabobank is among many financial institutions taking advantage of quantum computing to prevent fraudulent transactions and protect sensitive customer information – by including this technology into their infrastructure, these institutions can ensure they stay ahead of fraudsters while offering unparalleled levels of protection to their customers.
