Quantum computers will revolutionize finance

“In our team, we are also interested in technologies that have the potential to disrupt the sector,” Yannick Huchard comments. “Quantum computing is one of them, as well as artificial intelligence and blockchain. The world also talked a lot about the metaverse last year, which is also part of our work.

Can you explain in a few words what quantum computers are?

Basically, today’s computers run on a binary system. Binary is the basic language that uses only 0 and 1. Quantum computing will completely change this approach in the sense that we will rely on quantum properties. You should know that the basic language will not be 0 and 1, but numbers which will oscillate between 0 and 1 — the comma digits, if you will.Mathematically, this makes it possible to have exponential capabilities compared to binary and conventional computers.

This will allow us to perform much more complex, diverse, and powerful calculations than we have today. However, this does not mean that tomorrow we will stop using the computers we have today. Both are complementary in the forms of accounts.

Quantum computers are used to solve problems that are too complex for conventional computers. In finance what are the problems?

“You have to look at the problems that a multidimensional multivariate would have. For example, computer security today relies on something called PKI (Public Key Infrastructure). Cybersecurity is always a race in terms of how much computing power one has and how easy it is to Hacking cryptographic algorithms.The more powerful computers are, the more we can make ciphers that will be complex – but at the same time we will have more power to crack these codes, since hackers have the same tools.The basic idea is to make ciphers that are difficult to crack.

The problem is that the day quantum computers become more common, we will break these encryption algorithms. So we have to anticipate when quantum computers will be here and make ciphers that are “post-quantum resistant” and therefore so safe that they will resist quantum computers.

There is a lot of speculation about AI too because quantum computers are already adapting to the way AI operates.

    Yannick Huchar

Yannick HucharAnd Chief Architects DrAnd a job

Besides improving banking cyber security, what other benefits can this technology bring?

There is everything to do with dynamic portfolio management. Normally, the average person does not have many products in their portfolio, but a company like Blackrock or ING will have management with thousands of variables to balance in order to have good risk management, but also maximize rewards compared to the risks they are willing to take. There are a lot of different risks, and all of those risks are variables, and it’s very difficult to quantify all of these relationships and balance those variables in a traditional computer. A quantum computer can handle this because it was designed to.

There is a lot of speculation about AI too because quantum computers are already adapting to how AI works.

Could quantum computers also help combat money laundering?

“What we are asking banks today is to practice anti-money laundering more and more permanently. It’s like with hacking – money laundering techniques have become more sophisticated. What has changed in recent years is that financing is only diversifying. So the way we manage money flows is getting more and more complex. We have A lot of payments we go through, and in those payments there’s a part that can cause fraud ‘hits.’ The more transactions you process, the harder it is to know which ones might be fraudulent or are actually potentially fraudulent. We need more and more AI models to manage this.

Within 5 to 10 years, we will have the first viable quantum computers.

Yannick Huchar

Yannick HucharAnd Chief Architects Dr And a job

Quantum computing mainly belongs to the field of research. When will it be used within companies?

“It’s still hard to say because it’s still in the research realm, even quantum physics itself. We understand by observation, but it’s complex. It’s thought that in 5-10 years we’ll have the first viable quantum computers — but in my opinion they’ll be much more viable.” The same way the cloud works today.

These computers may have a positive impact on the world of finance, so does a closed circuit simulation confirm this theory?

“For the vast majority, yes, but it’s not perfect yet. There are still things to figure out, and for that it could take 5-10 years. Correcting algorithms are still a brake; in quantum computing, there are interactions that don’t follow the rules of physics as we understand it today. Then, the observer influences the results, that is, once one observes the result, he disturbs the quantum result.It can still evolve, of course.

At the beginning of our interview, you mentioned the metaverse. Is there a danger that quantum computing will fall into oblivion like the current metaverse?

“It is possible, if the research takes longer than expected. When we take the example of artificial intelligence, at first we are not sure when and where it will be applicable, and after twenty years we see its concrete use on a daily basis. Moreover, the intersection of artificial intelligence with Quantum computing has the potential to massively revolutionize this sector.”

This article was published in the Newsletter Paperjam + Delano Finance, Luxembourg’s weekly source of financial information. Subscribe using this link. It was written for Delano, translated and edited for Paperjam.

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