Quantum computing makes more and more headlines as an emerging disruptive technology. This is not without reason. Various applications of quantum computers have been identified that cannot be achieved by classical computers. For example, quantum computers of sufficient size will be able to efficiently:
• break cryptography (encoding or hiding information) that we use in our daily lives, think of bank transactions, website identification, network access, encrypted communication,
and so on
• discover catalysts and chemical processes to produce fertilizers using much less energy than is required today. Such innovation could reduce global energy use by 1 to 2 percent.
• run much more complex simulations than possible with classical computers
• solve portfolio optimization problems, with restrictions on the maximum number of different stocks in a portfolio or restrictions on the minimum trade size
• train complex machine learning models
• price complex financial products
This article discusses what quantum computing is and what its impact could be on investment management. The first two sections discuss the history and the appeal of quantum computing. The third and fourth section delve into how quantum computers work and where we stand today. Finally, the author discusses potential applications of quantum computing in the investment management industry.
in VBA Journaal door Tjeerd van Cappelle