[ U P D AT E ]
Banks exploring
potential
use cases
for quantum
computing
A HANDFUL OF BANKS ARE
CERTAINLY EXPLORING THE
POTENTIAL OF QUANTUM
COMPUTING AND ANALYSING
POSSIBLE, VIABLE USE CASES
FOR THE TECHNOLOGY.
I
t usually takes a minimum of around 10
years for pharmaceutical groups to discover
and test a new drug before they bring it to
market, which explains why the industry is
devoting so much of its energy to quantum
computing. Major companies are genuinely
interested in the technology’s potential be-
cause it can theoretically solve very complex
business problems that are far too advanced
for sequential computer processing power
to cope with.
Through the application of this technology,
pharmaceutical giants, for example, hope
to generate massive R&D cost savings and
increase the rate at which they discover new
medicines.
Banks are being urged not to miss a trick
on quantum computing by a number of
technologists. “It is time to jump into the
boat and become part of the quantum com-
14
Global Custodian
Winter 2018
puting revolution. There are huge benefits
to be realised for those first-movers, and it
is something – which as a start-up – we are
very excited about,” said one expert at Sibos
in Sydney.
Boston Consulting Group (BCG) is certain-
ly convinced by the technology’s intrinsic
worth predicting the quantum computing
market could morph into a $50 billion indus-
try by 2030.
A handful of banks are certainly exploring
quantum’s potential and analysing possible,
viable use cases for the technology.
A paper produced by Standard Chartered
in conjunction with NASA and the Universi-
ties Space Research Association, a research
group, said quantum computing could be
applied to portfolio optimisation at asset
managers.
Meanwhile, other financial services experts
believe quantum could be used in derivative
pricing, managing highly complex risks and
improving operational inefficiencies in areas
like clearing and trade reconciliations. The
road to full quantum computing adoption is
a long one, and the technology is clearly not
going to disrupt banking immediately, evi-
denced by BCG’s analysis, which estimates
the technology will not reach full maturity
for another 25 years, raising questions as to
whether the industry has enough patience
to wait that long.
Technologists at Sibos, however, felt BCG’s
forecasts were too conservative, suggesting
that quantum’s impact could be felt in five
to 10 years. Even so, a number of people be-
lieve the debate about quantum computer
is premature. There is still ambiguity about
whether the technology actually exists let-
alone works.
The BCG study said a quantum simulation
requires around 150 logical qubits, which has
yet to be achieved although IBM created a
20-qubit quantum processor while Goog-
le managed to build a 72-qubit quantum
processor.
Along with legitimate reservations about
whether the technology is real or imagined,
the costs of incorporating quantum com-
puting (assuming it is real) into business
activities are going to be high, and many
banks are unsure if the economics make it
worthwhile, particularly as many are facing
margin pressures.
The technology is also hamstrung by
the fact that current, early models cannot
process that much data, according to one
expert, further narrowing the technology’s
applicability in financial services. While
quantum is certainly a fascinating premise,
more research needs to be conducted into
the technology.