(DigitalJournal) Securities have become more complex in the realm of banking, along with risk analysis and debt structures, all of which come with their own set of issues. Current computing power can only handle and process a finite amount of data, which is why many of the major banking institutions are investing in and focused on incorporating quantum computing into their daily activities. According to Deltec Bank – Bahamas, “Quantum Computing will allow Banks to provide better security and services for their clients while helping to reduce risks that come with credit defaults, market crashes, and even fraudulent activities.”
Advances in quantum computing will pave the way for technological advances like quantum key distribution. This will help protect encrypted communications allowing systems to automatically destroy any messages that have been intercepted or tampered with. In the banking industry where financial and security transactions are private and require the utmost secrecy, this will help prevent risks associated with these large transactions.
Banks and financial institutions utilize Monte Carlo simulations to analyze the potential impact of risk and uncertainty of various models. The downside of Monte Carlo analytics is the limitations of error estimations, which comes back to the lack of computing power. For banks who target and use prediction modeling, quantum computing will expand these predictions and provide a firmer lever of accuracy.
NOTE: A disclaimer is posted with this article explaining that Robin Trehan, is Senior VP at Deltec International www.deltecbank.com. The views, thoughts, and opinions expressed in this text are solely the views of the author, and not necessarily reflecting the views of Deltec International Group, its subsidiaries, and/or employees.