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Quantum Computing Applications in the Financial Services Industry: End-User Cases and Market Forecasts

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  • 36 Pages
  • January 2022
  • Region: Global
  • Inside Quantum Technology
  • ID: 5521656

In late 2019, Bank of America claimed quantum computing “would be as revolutionary in the 2020s as smartphones were in the 2010s.” Goldman Sachs was quoted in January 2020 saying quantum computing has the potential to become a critical technology in the financial services sector. Other big banks have made commitments to quantum computing including JPMorgan, Citigroup and Wells Fargo as well as some European and Asian banks. Insurance companies, credit card companies, financial consultants and hedge funds are also interested. Many financial service firms are already taking on sizeable staffing of people experienced in the overlap of quantum technology and financial industry activity.

This report describes the opportunities, challenges and deployment options surrounding the application of quantum computing in the financial services vertical. It discusses in detail the role that quantum computing plays in portfolio management and construction, currency arbitrage, fraud detection, trade settlements, analytics-driven CRM, credit scoring, risk modeling, tax-loss harvesting and derivative pricing. The report also takes a look at quantum computing’s role in accelerating the use of AI and machine learning in the financial services sector.

The report provides a ten-year forecast of what the banking and financial services sector will spend on quantum computing in the next decade, and it discusses the evolution of quantum computing in the financial services sector from the current “proof of concept phase” to widespread usage in a decade or so. The report looks at smaller and less-expensive quantum computers that could, for example, be used in smaller financial institutions and in the role of network computers in transaction networks.

This report concludes with a review of the current plans of what the leading full-stack quantum computers are doing in the financial services space. It also provides a focus on sales strategy to sell banks and other financial institutions on using quantum computing


Table of Contents

Chapter One: Background to this Report
1.1 Executive Summary - Quantum Computing in Financial Services
1.2 Putting Business Ahead of Research
1.3 The Math is Out There, the Hardware is Not
1.4 Methodology of this Report
1.4.1 Forecasting Methodology
Chapter Two: Quantum Computing in Financial Services: Attitudes and Market Evolution
2.1 Attitudes to Quantum in the Financial Services Industry
2.2 Changing Market and Deployment Patterns of Quantum Computing for Financial Services
2.2.1 A Note on Regulation and Quantum Computing Deployment
2.3 IT Aspects to Quantum Computing Deployment in Financial Services
2.3.1 Hardware Aspects
2.3.2 Software Aspects
2.3.3 Impact on Coding of a Probabilistic Approach
2.3.4 Challenges to Cloud Provisioning
2.3.5 Batch-like Nature of Quantum
2.4 Key Points from this Chapter
Chapter Three: Quantum Computing in Financial Services - Use Cases
3.1 Using Quantum Computing within Financial Services
3.1.1 Quantum Machine Learning
3.2 Trade Settlements
3.2.1 High Frequency Trading (HFT)
3.3 Risk Modeling
3.4 Accelerating Artificial Intelligence/Machine Learning (AI/ML)
3.5 Goals-based Investment (Static) Portfolio Construction
3.6 Tax Loss Harvesting
3.7 Fraud Detection
3.8 Analytics-Driven CRM
3.9 Dynamic Portfolio Management
3.10 Credit Scoring
3.11 Currency Arbitrage
3.12 Derivative Pricing
3.13 Key Points from this Chapter
Chapter Four: Vendors and Other Considerations
4.1 Vendor Considerations: The Quantum Computing Industry
4.1.1 Full-Stack Quantum Computers
4.1.2 Access to Quantum Computing Resources
4.2 Sales Strategies for Quantum Computers in Banking and Financial Services
4.3 Cybersecurity in the Financial Services Data Center
4.4 Expenditures on Quantum Computers
  • About The Publisher
  • About the Analyst
  • Acronyms and Abbreviations Used In this Report
List of Exhibits
Exhibit 2-1: Evolution of Quantum Computing in the Financial Services Sector
Exhibit 3-1: Use Case Timeframes for Quantum Computers in Financial Services
Exhibit 3-2: Common Derivative Types
Exhibit 4-1: Key Full-Stack Quantum Computing Companies
Exhibit 4-2: Vendor Activities for Safely Crossing the Quantum Computing Chasm



Companies Mentioned

  • Citigroup 
  • JPMorgan
  • Wells Fargo