AI in FinTech - Quantum Computing
Vidhya Vijayakumar
Business and Technology Program Leadership | Technology and Operational Risk Management | Specialising in Regulatory, Risk and Governance | Equity & Debt Markets, FX and Security Lending
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This week, I came across quantum computing in my daily reading. The word "Quantum" piqued my interest. To my surprise, there is a lot of talk about Quantum Computing, although it is in its nascent stages. Let's dip our toes to find out what this is all about. As I continued reading about this topic, I realised I was scratching the surface. Let's start here and study more in the following days, weeks and beyond.
What is Quantum Computing?
Quantum computing is a revolutionary technology where quantum mechanics forms the basis. There are two key concepts that we need to understand to explain quantum computing.
(1) Superposition:
As we all know, traditional computers are ultimately represented by 0 and 1, and a bit is either 0 or 1 at any time. Quantum computing uses a concept called "qubits", where more than one state can coexist at the same time. This concept of multiple states existing simultaneously is called "superposition". This superposition allows Quantum computing to be faster than traditional computing. The superposition collapses as soon as the states are measured.
(2) Entanglement:
As the name suggests, entanglement occurs when two independent particles become "entangled," meaning that when measuring the state of one, the second particle's state is determined regardless of the distance between two particles.
How Quantum Computing works?
The concept of superposition allows for multiple states to coexist simultaneously. The Quantum Superposition has the potential to solve complex problems without being limited by traditional bits, which are either 0 or 1. Let's try to solve a simple probability problem of a coin toss. The answer is either head or tail at any given time. Imagine quantum computing dealing with the problem as both head and tail (superposition) until it is decision time when the answer is either head or tail. Say two coins are "entangled". According to the concept of "entanglement", measuring the state of one coin reveals the state of the second coin without explicitly measuring the second coin.
Quantum Computing in FinTech
Challenges with Quantum Computing
Although there are NO Quantum Computers available today for regular commercial use, Quantum Computing is undoubtedly fascinating and has the potential to impact FinTech in a big way. This is evident with the partnership between IBM, AWS and financial institutions such as Goldman Sachs and HSBC to explore quantum computing for various applications.
References
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Business and Technology Program Leadership | Technology and Operational Risk Management | Specialising in Regulatory, Risk and Governance | Equity & Debt Markets, FX and Security Lending
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