Quantum computing for finance

Herman, Dylan; Googin, Cody; Liu, Xiaoyuan; Sun, Yanlong; Galda, Alexey; Safro, Ilya; Pistoia, Marco; Alexeev, Yuri

doi:10.1038/s42254-023-00603-1

Cited by 63 publications

(20 citation statements)

References 207 publications

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“…These PoCs are centered around areas where quantum computing is projected to offer significant advantages over classical algorithms. Such areas can be credit risk analysis [2], [3], derivative pricing, risk modeling, portfolio optimization, natural language processing, or fraud detection [1]. By focusing on high-impact areas, ISP aims to leverage quantum technologies to revolutionize key aspects of its operations.…”

Section: The Qcc's Journey So Farmentioning

confidence: 99%

“…Quantum Computing is foreseen to be the next big step in the evolution of the computing domain. This new computational paradigm is rooted in the laws of quantum mechanics, defining computing devices that are theoretically able to outperform any other classical computer in performing certain applications in finance [1], [2], [3], chemistry [4], biomechanics [5], machine learning [6], [7], networks [8], [9] and many other domains. In a classical computer, the basic unit of information is the bit, which can take 0 or 1 binary values.…”

Section: Introductionmentioning

confidence: 99%

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Quantum Computing in Finance: The Intesa Sanpaolo Experience

Sotelo,

Corbelletto,

Dri

et al. 2024

IEEE Eng. Manag. Rev.

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Quantum Computing (QC) promises to revolutionize the computing domain with its ability to outperform classical computing in various applications. This article explores the potential of QC and its impact on the financial industry, among other domains. It focuses on the Quantum Competence Center at Intesa Sanpaolo, the largest bank in Italy. The Quantum Competence Center aims at leveraging quantum technologies to drive innovation and enhance banking and financial services. This article discusses the establishment of this corporate entity, its objectives, collaborations with academic institutions and quantum providers, workforce development initiatives, future perspectives, and the challenge of integrating quantum computing into the bank's operational workflow.

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Section: The Qcc's Journey So Farmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Quantum Computing in Finance: The Intesa Sanpaolo Experience

Sotelo,

Corbelletto,

Dri

et al. 2024

IEEE Eng. Manag. Rev.

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show abstract

“…Further evidence of the superiority of quantum-mechanical models over the classical physical ones can be provided by considering the recent advances in the field of quantitative finance, where the methods of quantum physics play an increasingly important role [112,113]. Historically, the financial markets have been strongly influenced by the emotions of traders [114].…”

Section: The Origin Of Quantum Advantage In Models Of Social Mediamentioning

confidence: 99%

“…Historically, the financial markets have been strongly influenced by the emotions of traders [114]. Therefore, it has been established that the processes that underpin the formation of the opinions of traders and the formation of opinion in social networks are essentially similar and intertwined [115,116] and that their analysis would benefit from the richness of the quantum states used in respective quantum quantitative finance models [112,113].…”

Section: The Origin Of Quantum Advantage In Models Of Social Mediamentioning

confidence: 99%

Quantum-Mechanical Modelling of Asymmetric Opinion Polarisation in Social Networks

Maksymov,

Pogrebna

2024

Information

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We propose a quantum-mechanical model that represents a human system of beliefs as the quantised energy levels of a physical system. This model represents a novel perspective on opinion dynamics, recreating a broad range of experimental and real-world data that exhibit an asymmetry of opinion radicalisation. In particular, the model demonstrates the phenomena of pronounced conservatism versus mild liberalism when individuals are exposed to opposing views, mirroring recent findings on opinion polarisation via social media exposure. Advancing this model, we establish a robust framework that integrates elements from physics, psychology, behavioural science, decision-making theory, and philosophy. We also emphasise the inherent advantages of the quantum approach over traditional models, suggesting a number of new directions for future research work on quantum-mechanical models of human cognition and decision-making.

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“…For a broader review of quantum computing applications in finance, see refs. (Herman et al 2023;Jacquier et al 2022;Orús et al 2019).…”

Section: Introductionmentioning

confidence: 99%

Quantum Computing Approach to Realistic ESG-Friendly Stock Portfolios

Catalano,

Nasello,

Guterding

2024

Risks

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Finding an optimal balance between risk and returns in investment portfolios is a central challenge in quantitative finance, often addressed through Markowitz portfolio theory (MPT). While traditional portfolio optimization is carried out in a continuous fashion, as if stocks could be bought in fractional increments, practical implementations often resort to approximations, as fractional stocks are typically not tradeable. While these approximations are effective for large investment budgets, they deteriorate as budgets decrease. To alleviate this issue, a discrete Markowitz portfolio theory (DMPT) with finite budgets and integer stock weights can be formulated, but results in a non-polynomial (NP)-hard problem. Recent progress in quantum processing units (QPUs), including quantum annealers, makes solving DMPT problems feasible. Our study explores portfolio optimization on quantum annealers, establishing a mapping between continuous and discrete Markowitz portfolio theories. We find that correctly normalized discrete portfolios converge to continuous solutions as budgets increase. Our DMPT implementation provides efficient frontier solutions, outperforming traditional rounding methods, even for moderate budgets. Responding to the demand for environmentally and socially responsible investments, we enhance our discrete portfolio optimization with ESG (environmental, social, governance) ratings for EURO STOXX 50 index stocks. We introduce a utility function incorporating ESG ratings to balance risk, return and ESG friendliness, and discuss implications for ESG-aware investors.

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Quantum computing for finance

Cited by 63 publications

References 207 publications

Quantum Computing in Finance: The Intesa Sanpaolo Experience

Quantum Computing in Finance: The Intesa Sanpaolo Experience

Quantum-Mechanical Modelling of Asymmetric Opinion Polarisation in Social Networks

Quantum Computing Approach to Realistic ESG-Friendly Stock Portfolios

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