New experimental analysis released today from Rigetti Computing and the Commonwealth Bank of Australia paves the path forward for practical quantum computing in the financial services industry.
Quantum computers have the potential to substantially reduce the time and cost to perform the complex, time-consuming calculations that banks use to optimize portfolios, detect fraud, analyse risk, and determine credit score. Institutions like the Commonwealth Bank run calculations like these overnight at mass scale, but their results become less valuable as markets shift throughout the day.
The results from Rigetti and CBA demonstrate for the first time how a quantum computer can optimise a portfolio rebalancing strategy, including real-world factors such as the number of portfolio assets, total investment value, and trading costs. Leveraging research led out of the NASA Ames Research Center, the team was able to calculate how to achieve optimal risk and return for a small portfolio on the Australian Stock Exchange.
Quantum computers promise to be exponentially faster than their classical counterparts, but only for a subset of computing problems. A key challenge for the industry is identifying these promising use cases, and this search is very much at its infancy.
This research tests a small-scale banking problem in a simulated environment, similar to demonstrating the viability of a wing design working in a wind tunnel. At this scale it would not outperform traditional computers for the same use case, however, it brings the industry one step closer to understanding how quantum advantage could be achieved for practical financial use cases.
CBA began exploring quantum software with the Australian quantum computing start-up QxBranch in 2015, prior to its recent acquisition by Rigetti. The team developed a quantum computing simulator in 2017, and have been utilising this technology to explore applications of relevance to the bank.
“Our groups have been working together to accelerate the commercial feasibility of applying quantum computing to practical use cases,” said Michael Brett, SVP of Applications at Rigetti and former CEO of QxBranch. “Bringing together quantum technologists with financial services experts was necessary to develop this application. It would not have been possible without close collaboration between domain experts from each field.”
“CBA is investing in quantum computing exploration to ensure we have a front-row seat to the potential of its application to the financial services industry,” said Samantha Lawson, General Manager, Strategy, Transformation and Emerging Technology at CBA and sits on the board of Silicon Quantum Computing as CBA’s representative in the joint venture.
Mark Hodson, Brendan Ruck, Hugh (Hui Chuan) Ong, David Garvin, Stefan Dulman. Portfolio rebalancing experiments using the Quantum Alternating Operator Ansatz. https://arxiv.org/abs/1911.05296