- Quantum technology is increasingly useful for the financial services sector, in terms of risk simulations, portfolio optimization, cryptocurrency mining, and improving cybersecurity.
- McKinsey sees significant and potentially “game-changing” quantum computing benefits, including analyzing large or unstructured data sets more effectively and gleaning sharper insights.
Quantum technology isn’t new, but it is entering a more advanced and exciting era. Rapidly developing and with potential to change the world, it leverages quantum mechanics to solve problems beyond the capabilities of classical computers – even supercomputers. But what exactly is quantum technology? We explore that below.
History of quantum computing
First, some background: In 1982, American physicist Richard Feynman gave a lecture proposing the use of quantum mechanics for calculations too complex or impractical for traditional computers.
He said: “I’m not happy with all the analyses that go with just the classical theory, because nature isn’t classical, dammit, and if you want to make a simulation of nature, you’d better make it quantum mechanical…” Feynman’s ideas developed into quantum computing and continue to influence the field today – he’s considered one of its founders.
Fast forward to 2016, and IBM made history by launching a cloud-based quantum processor for people to run experiments. Since then, they’ve worked through an ambitious roadmap, propelling quantum computing forward. For example, in 2019, they ran quantum circuits on the cloud; in 2022, they unveiled the 433-qubit Osprey processor; and in 2023, they’re on track to release the 1,121-qubit Condor processor.
Quantum computing 101
According to Dario Gil, Senior Vice President and Director of IBM Research, several fundamental concepts make quantum computing remarkably different from classical computing. Where traditional computers use bits –binary units of information – quantum technology uses quantum bits – qubits.
Qubits carry data quantum mechanically – the same way nature does. A qubit isn’t bound to a binary system like ones and zeros, making it incredibly powerful (and complicated). For example, a supercomputer struggles when it comes to simulating how molecules behave, because it doesn’t have the memory to handle all possible permutations. Enter quantum technology, creating superconducting multidimensional computational spaces for simulations.
Quantum computing is making waves, but it won’t replace classical computing. Instead, its exponential capabilities are used to solve tricky problems.
Where are quantum computers used today?
Quantum technology has far-reaching uses for manufacturers, industrial chemists, engineering firms, shipping companies, and more. For example:
- Mercedes-Benz utilizes quantum computing to design next-generation batteries for electric vehicles.
- ExxonMobil is exploring quantum algorithms to ship reliable, clean, and affordable energy.
- CERN, the European Organization for Nuclear Research, is harnessing quantum technology to explain cosmic mysteries.
- Rolls Royce is building quantum computers to develop more fuel-efficient aircraft engines.
Quantum technology is also increasingly useful for the financial services sector, in terms of risk simulations, portfolio optimization, cryptocurrency mining, and improving cybersecurity. Indeed, JP Morgan Chase and IBM used Quantum Amplitude Estimation – a Monte Carlo-esque sampling algorithm – to compute European option pricing.
McKinsey sees significant and potentially “game-changing” quantum computing benefits, including analyzing large or unstructured data sets more effectively and gleaning sharper insights. As a result, financial institutions can make better decisions and enhance customer service. They see use cases extending to corporate finance, capital markets, and encryption-related activities.
New era of Quantum computing
Despite those varied and growing use cases, quantum computing is often noisy, unreliable, and error-prone. But in June 2023, IBM researchers announced they’d formulated a method to manage those issues.
Using a 127-qubit quantum processor to simulate the Ising model – the behavior of atom-scale bar magnets in a magnetic field – the calculation took less than a thousandth of a second, but was unreliable due to quantum noise. To remedy that, the team subtracted the noise effects from the unreliable quantum calculations – error mitigation.
“We can amplify the noise very precisely, then rerun that same circuit,” says Abhinav Kandala, Manager of quantum capabilities and demonstrations at IBM Quantum. “Once we have results of those noise levels, we can extrapolate back to what the result would have been in the absence of noise.”
Jay Gambetta, Vice President of IBM Quantum, adds: “We’re entering a phase of quantum computing I call utility.”
Quantum computing in the press
Recently, quantum technology has made headlines for various reasons, raising awareness and pushing the field forward. For instance:
- Theoretical physicist Michio Kaku thinks “the next technological stage will be in the quantum realm”. He believes it can be used to advance healthcare and cure molecular diseases like cancer, Parkinson’s, and Alzheimer’s. “We have to learn the language of nature – molecules and quantum electrons,” says Kaku.
- In August 2023, the Utter Pradesh Government signed a Memorandum of Understanding for a million-qubit quantum-focused data center.
- Phasecraft, a cutting-edge quantum algorithm startup, raised £13 million Series A funding to help them reach “practical quantum advantage” – when quantum computers outperform classical ones for real-world applications.
- Google has introduced new cryptography to Chrome, securing data and making it immune to quantum computers attempting to access data – also known as the quantum apocalypse.
Sopra Banking Software & quantum technology
Here at Sopra Banking Software, we believe in quantum technology. Our goal is to familiarize ourselves with the field, helping us guide and support our customers. To achieve that, we’re investing in the technology and relying on an ecosystem of startups to build new and disruptive quantum computing solutions.
We also understand quantum computing isn’t the only solution. Rather, it works in parallel with traditional computing, solving issues as and when appropriate.
Quantum technology revolution
Quantum qubits offer remarkable possibilities to a broad range of industries. Harnessing their power is still a work in progress, but the field is rapidly advancing and set to shape the future. To learn more, browse Qiskit, an open-source, Python-based software development kit for quantum computing.
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