(FinancialTimes) Quantum computing could be brought to bear on some of the most complex calculations in financial markets within five years, considerably earlier than expected, according to research jointly conducted by Goldman Sachs and QCWare.
The research suggests that programmers looking to harness the machines could achieve practical results sooner in return for giving up some of the huge gains in performance that quantum systems promise. The work reflects a recent effort by companies investing in the field to search for “quantum advantage”, or a marginal practical improvement compared with existing computers. That is a more modest goal than waiting for full “quantum supremacy”, the term used for when quantum systems are able to solve problems that are essentially impossible for a classical computer.
The calculations rely on so-called Monte Carlo simulations, which involve making a large number of projections about future random market movements to calculate the probability of a particular outcome. Monte Carlo methods, used to evaluate risk and simulate prices for a variety of financial instruments, involve complex calculations and consume significant time and computational resources. Typically, these calculations are executed once overnight, which means that in volatile markets, traders are forced to use outdated results. Providing traders, who are always looking for an additional edge in the markets, with a quantum computing approach to perform these risk assessments with far greater speed means that simulations could be executed throughout the day and could transform the way financial markets worldwide operate.
“Our team at Goldman Sachs is focused on developing the best technology for the firm and our clients,” said William Zeng, Head of Quantum Research, Goldman Sachs. “Quantum computing could have a significant impact on financial services, and our new work with QC Ware brings that future closer. To do this, we introduced new extensions to a core technique in quantum algorithms. This exemplifies the fundamental contributions that our group looks to make in the field of quantum technology.”