Quantum Computing for Financial Services

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Fortune favors the bold ⁠— and the ready

What if you could run whole-market simulations better predicting what financial swing is just over the horizon?

IBM Quantum is working on these problems today while helping financial institutions as they explore the possibilities for quantum computing just outside the reach of classical computers. IBM is ready to partner as you discover early use cases, equip your organization with practical quantum skills, and access world-class expertise and technology to advance the field of quantum computing.

Where to look for quantum advantage

Personalized finance — Customers demand personalized products and services that rapidly anticipate their evolving needs and behaviors.

25% of small- and medium-sized financial institutions lose customers due to offerings that don’t prioritize customer experience.

It’s difficult to create analytical models that sift through mounds of behavioral data quickly and accurately enough to target and predict which products are needed by specific customers in near real-time. A similar problem exists in fraud detection for finding patterns in unusal behaviors. It is estimated that financial institutions are losing between USD 10 billion and 40 billion in revenue a year due to fraud and poor data management practices.

For customer targeting and prediction modeling, quantum computing could be a game changer. The data modeling capabilities of quantum computers are expected to prove superior in finding patterns, performing classifications, and making predictions that are not possible today with classical computers because of the challenges of complex data structures.

Trading optimization — Complexity in financial markets trading activity is skyrocketing.

Investment managers struggle to incorporate real-life constraints, such as market volatility and customer life-event changes, into portfolio optimization.

Currently, rebalancing investment portfolios that keep up with market movements is significantly impacted by computational limitations and transaction costs.

Quantum technology could help cut through the complexity of today’s trading environments. Quantum computing’s combinatorial optimization capabilities may enable investment managers to improve portfolio diversification, rebalance portfolio investments to more precisely respond to market conditions and investor goals, and more cost-effectively streamline trading settlement processes.

Risk profiling — Risk analysis calculations are hard because it is computationally challenging to analyze numerous scenarios.

Compliance costs are expected to more than double in the coming years.

Financial services institutions are under increasing pressure to balance risk, hedge positions more effectively, and perform a wider range of stress tests to comply with regulatory requirements.

Today, Monte Carlo simulations — the preferred technique to analyze the impact of risk and uncertainty in financial models — are limited by the scaling of the estimation error. Quantum computers have the potential to sample data differently by testing more outcomes with higher precision, providing a quadratic speed-up for these types of simulations.

Are you quantum ready? Get started today.

Quantum computing will begin significantly transforming the financial services landscape over the next decade. Financial institutions that adopt quantum early can seize major competitive advantages, including the potential to leapfrog competitors to become market leaders. So, what steps should financial services institutions take today to begin exploring quantum computing?

1.

Identify quantum champions in your organization to experiment with actual quantum computers and explore the potential applications of quantum computing for your industry.

2.

Test quantum algorithms to understand their potential advantages and evaluate how they may impact your business. For example, an artificial intelligence classifier and an option-pricing finance simulator are already available.

3.

Consider partnering with like-minded collaborators, providers, application developers, with supporting technologies, and organizations with similar challenges to gain end-to-end access to an entire quantum computing ecosystem.

4.

Experience the IBM Quantum Network. We have a vast portfolio of capabilities, services, and industry expertise to help jumpstart your quantum journey.

Connect with Trusted Partners

IBM Quantum Network is a global community of visionary companies, academic institutions, startups and national research labs working together to advance quantum computing.

Enterprise-wide Access, Anytime

IBM Quantum provides cloud-based software for your team to acess our quantum computers anytime. No matter how big your team is, large or small, IBM Quantum Experience platform is ready to support your team as they explore the potential of quantum.