Quantum computing & finance: imagining the future with IBM

Quantum computing is taking great strides. Big players are talking about it, and even big nations are scrambling to achieve ambitious, concrete and challenging results. But how will the world of finance benefit when they are achieve this? We asked Federico Mattei, Innovation and Technical Leader, and IBM Quantum Ambassador.

What are your latest innovations in the field of quantum computing?

On November 16, IBM held the Quantum Summit 2021, the annual meeting where in which new developments in quantum software and hardware are presented. This year’s edition was full of important announcements.
The performance of quantum computers is measured on three important axes: scalability, quality and speed.
Scalability measures the number of quantum bits (qubits) per processor. Following the announcement of the 27-qubit Falcon processor in 2019 and the 65-qubit Hummingbird processor in 2020, IBM announced the 127-qubit Eagle processor at Quantum Summit 2021, the first to surpass the 100-qubit-per-processor threshold. IBM’s roadmap is to exceed 1,000 qubits per processor in 2023 with the Condor processor. Processor quality is measured in Quantum Volume, a quantity that takes into account various technical characteristics of the processor. Over the past four years, IBM has doubled the quantum volume of its processors every year.
As for the speed of quantum systems, IBM measures this in CLOPS (Circuit Layer Operations Per Second). Last year, within the Qiskit quantum development framework, IBM released the Qiskit Runtime module, which has improved the execution speed of certain algorithms by up to 120 times – and is available on all IBM Quantum systems.

Why and how are you working on frictionless development? With what objective?

We are working on introducing new functionalities that take advantage of today’s classical computing resources, with which we hope to achieve Quantum Advantage – the point where certain information processing tasks, for practical applications, can be performed more efficiently or cost effectively on a quantum computer, versus a classical one. Our goal is to make sure that our users can take advantage of large-scale quantum resources without having to worry about the complexities of hardware: we call this development ‘frictionless’ and we plan to achieve it with through a serverless execution model.
Looking ahead to 2025 and beyond, we think that our dream of frictionless quantum computing will become a reality, where hardware will no longer be an issue for users or developers. By then, we anticipate that developers at all levels of the quantum computing stack will rely on our advanced hardware with a cloud-based API that will work seamlessly with high-performance computing resources to push the limits of computing in general and include quantum computing as a natural component of their existing computing pipelines.

What applications of quantum computing in the world of finance are possible today?

Despite the very rapid strides that quantum computing has been making in recent years, we have not yet reached Quantum Advantage, i.e. the point at which quantum systems can significantly outperform traditional systems for practical applications and thus be used in real business contexts.
However, it is essential to take advantage of the time that separates us from this goal to identify the applications that will benefit most from quantum computers and to start writing the first applications for this type of systems. We have a number of case studies with partners around the world exploring quantum applications in chemistry for battery and OLED progress, finance portfolio and risk optimization, and even machine learning to uncover new information from CERN’s Large Hadron Collider data, among other examples

and in the future?

Specific use cases of quantum computing for financial services can be classified into three main categories: targeting and forecasting, trading optimisation and risk profiling. We are exploring potential use cases in each of these categories with leading financial institutions around the world that have joined the IBM Quantum Network (a network of companies, start-ups, academic istitutions and research centres that has now grown to over 170 participants worldwide).
The application of quantum technology to financial problems, particularly those dealing with uncertainty and optimisation, will prove extremely beneficial to first movers. Imagine being able to make calculations that reveal dynamic arbitrage possibilities that competitors are unable to see. In addition to this, the use of behavioural data to improve customer engagement and a faster reaction to market volatility are some of the benefits we expect quantum computing to offer.

How long do you think is it it will be before the Quantum Advantage era? What will happen at that time?

Exceeding 100 qubits is a very important step towards Quantum Advantage, and we can expect that exceeding 1,000 qubits per processor in 2023 will be a major turning point in our ability to explore applications with a Quantum Advantage. In the IBM Quantum roadmap, in addition to hardware improvements, there are many software components that will make the pursuit of Quantum Advantage faster. Those who have invested in training and have prepared their application fleets for the arrival of quantum computers will have a significant business advantage over those who have been left waiting.

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Author: Tudor Sava

19 Gennaio 2022