How does quantum computing fit into quant finance?
Quantum computing is the most popular area of interest in finance, with 57% of people interested in speed, efficiency, and security. However, experts admit that quantum computing is likely 5-10 years away due to technical challenges. Quantum computers are not intended to replace classical computers, but rather provide unique capabilities for solving complicated, data-intense problems. Goldman Sachs is exploring the use of quantum machines to price complex derivatives. Other areas that lend themselves well to quantum computing include portfolio optimization and cryptography. The focus is on speed, edge in client services, and potential costs savings over time.
Reference: https://deloitte.wsj.com/cio/quantum-computing-in-financial-services-will-it-pay-off-cd34aaa6)
The financial services industry should prepare for quantum computing as spending on quantum-related capabilities is expected to grow quickly, from $80 million in 2022 to $19 billion in 2032. Firms developing quantum capabilities now could enjoy a competitive advantage. Quantum computers could enhance computational capabilities for complex mathematical operations but pose a risk to cybersecurity. The time to act is now to mitigate the risk.
- Increased demand for cyber software and services due to quantum cybersecurity vulnerabilities
- Entrepreneurial firms with point solutions providing comprehensive cybersecurity services
- Adoption of quantum-focused technologies could increase as vulnerabilities grow, but may also come more threats.
Thanks for the insights from Dr. Colin Soutar