(Menafin) Deltec, an independent financial services group that delivers bespoke solutions to meet clients’ unique needs has published another article discussing quantum computing’s effect on the finance industry.
Quantum computing can open a whole new dimension in the finance sector.The power of quantum computers can exponentially scale the capabilities of current machine learning approaches and help to create complex but very accurate risk models that can create such a gigantic difference in the finance sector.
Quantum computers can drastically improve market trading which also depends on a multitude of macro factors that cannot be modeled on classical computers easily. It can assist portfolio managers to simulate a large number of trading and investment scenarios so that they can opt for those that yield maximum returns.
Apart from these two crucial benefits of risk management and trade optimizations, there can be operational benefits due to the increased computational power of quantum computers. For example, faster backend and frontend operations for client services, faster KYC process, better asset management, to name the few.
There is one aspect of quantum computing that poses a threat to the finance industry. Quantum computers, having enough Qubits, can easily be used to apply brute force and break RSA encryptions that encrypt banking passwords. Security researchers are already working on ways to avoid this threat by the time quantum computers become a reality in the near future.