QuBites 2.8- Quantum Computing in Financial Services

Valorem's QuBites video series breaks down Quantum Computing concepts and use cases to help business leaders learn more about the next wave of technology disruption in quick and easy to consume episodes. In the 8th episode of QuBites Season 2, Rene welcomes Data Reply IT's Quantum and Accelerating Computing lead, Dr. Sara Felloni, to discuss quantum use cases and impact in the financial industry.

Transcript

Rene: Welcome to QuBites! Your bite- sized pieces of quantum computing. My name is Rene from Valorem Reply and today we're going to talk about quantum computing in the financial industry. And for this, I'm honored to have a very special expert guest today Dr. Sara Felloni. Hi Sara, and welcome to the show. How are you today?

Sara: Hi Rene. I’m very well, thanks. And glad to be here with you today.

Rene: Love it. Sara can you tell us a little bit about yourself and your background as it relates to quantum computing and financial industry and well your whole background in that?

Sara: Of course. I am lead in the Quantum and Accelerated Computing competence center at Data Reply IT. I have an academic background in Applied Mathematics and a PhD Quantum Computing, and I am currently exploring how quantum computing can benefit our customers in the financial services today.

Rene: That's impressive! PhD in quantum computing, well if you're not the expert then I don't know who it is. So, let's dive into today's topics. How is quantum computing related to the financial industry [today]?

Sara: So, quantum computing is a disruptive technology, you could call it a revolution from both the hardware and the software perspective. Several major players worldwide including D-Wave, AWS Microsoft and IBM have already brought quantum computers from academic laboratories to commercially evolving ecosystems. And when the remaining technological challenges are overcome, quantum computers are expected to surpass the current limitation of classical computers and will allow us to perform computational tasks which today take too long to process or are even impossible to handle with the current technology. And financial services, in my opinion, is one of the business sectors which can benefit the most from quantum computing. And right from its earliest stage. In fact, the financial sector has many core tasks and transactions run by algorithms where complexity is always a huge obstacle. Quantum computing is already starting for address the financial firms’ need for increased computational power.

Rene: Gotcha. So, basically there's a lot of challenges in the financial industry that can be optimized and can benefit from using quantum computing solutions. Can you share some examples and some use cases where you're already seeing the impact with quantum computing in the financial industry? For example, I hear about [use cases such as] portfolio optimization or risk management and some other things, but yeah, can you share any of these [quantum computing applications] where you see the impact already in the financial industry?

Sara: Yes, of course. And you are right, these are one of the most known use cases in financial services for quantum computing. So basically, financial services are already investing in quantum-inspired solutions which are able to bring measurable economic benefits and real business value in the near term. And in the long term, sub solutions will be ready to be deployed on working quantum hardware as soon as it reaches a suitable level of maturity and approachable costs. So, preparing today means getting ahead of the competition right now and moreover, it means ensuring to remain competitive in the future as the use of quantum solutions and technologies will continue to spread.

Rene: Gotcha. Yeah, so, that's pretty amazing. Can you actually tell us what - like you mentioned, you are working on this, you're leading this competency center at Reply for quantum computing in the financial industry. So, maybe you can also tell us about some use cases and which areas you're seeing the impact and what we at Reply are doing in these kind of fields.

Sara: Yes, of course. So basically, we are working in banking financial markets and insurance. And quantum computing applications in these fields range from security to targeting and prediction, to trading optimization, to risk profiling. And among the applications that are attracting more attention in investment finance, as you said before, you can surely count quantum portfolio optimization, quantum collateral optimization and quantum risk weighted asset optimization. And moreover, Quantum Monte Carlo methods are being applied to derivative pricing and valuation, and quantum machine learning approaches are being experimented where classical machine learning solutions already exist. Data Reply is already very active and well positioned in all these areas I just mentioned, as we count over three years of experience in both research and quantum projects with customers. In the field of quantum optimization in particular, we have worked in partnership with D-Wave, proposing to our customers advanced solutions running on D-Wave’s quantum annealing [system]. And we also developed MegaQUBO, a quantum-inspired accelerator ready and easy to be used in the cloud or on premises.

MegaQUBO can run on classical graphic processing units as well as quantum processing units and is able to solve complex combinatorial optimization models to improve business processes. QUBO stands for Quadratic Unconstrained Binary Optimization. We can support our customers in the data analysis and model creation, if necessary, but once the problem is converted into the QUBO form, it can be submitted to MegaQUBO, which reduces the solution without the need of further configurations. And this is what we call our quantum road map to early value, to improve business through more computational power starting from today. If you're curious to know more, just visit our website DataReply.IT and search for MegaQUBO.

Rene: Yeah, we talked about MegaQUBO also with Marco in the past and that's definitely something pretty amazing. And like you said, we are already working in quantum computing [for] three years, right? And achieved quite [valuable] impact already with a few customers. And that is that is fully impressive. Also worth mentioning of course we're also working with various vendors like for example Microsoft and Azure Quantum to leverage their quantum as a service solutions right?

Sara: Yes. Yes, correct.

Rene: So, that’s awesome! And like Sara was saying, just reach out if you have more questions. If you have a project you want to achieve, we're always happy to come and analyze it and see where value can be provided. And the financial industry for sure is very active when it comes to quantum computing and seeing totally impact. And I can tell you from my side, as I totally see that in the community and also while attending conferences and so on. You see a lot of attendees and presenters from the financial industry. And so, yeah, finance and quantum computing is just the future, probably. So yeah, if you're in finance, you definitely want look into quantum computing right.
Well, Sara, thank you so much. We're already at the end of the show. that was really amazing and I loved all the insights you shared today, very much appreciated.

Sara: Thank you Rene. It has been my pleasure to be your guest at QuBites. Thanks again!

Rene: Awesome. Thanks everyone for joining us for yet another episode of QuBites, your bite-sized pieces of quantum computing. Watch our blog, follow social media channels to hear all about the next episodes and the stuff we're doing in the quantum computing world. Take care and see you soon. Thanks for watching. Bye, bye.