On November 26, 2019, the FIA Japan Technology Committee held a seminar on “Quantum Computing and the future of Capital Markets”.
This seminar, hosted at Greenberg Traurig Tokyo Law offices, gathered around 40 attendees from diverse background: brokerage firms, banks, Quantum specialists, Quantum Computing related startups and new technology enthusiasts.
The seminar was delivered thanks to the contribution of Quantum Computing experts Paul Hiriart and Jean-Philippe Arias from QuantFi, a “deep tech” company created in early 2019 to perform scientific research in the field of quantum computing as applied to the field of Finance.
The first part of the seminar, “Quantum Computing Concepts”, covered fundamental principles of Quantum Computing (Qubit, gates, parallelism, entanglement, teleportation…).
In a second part, the Quantum Computing Market was reviewed. While the market is still in a nascent stage, the impact in terms of cost savings and revenue opportunities for industries shifting to Quantum Computing, once the technology is mature, is expected to exceed USD450 billion annually in the coming decades (source: BCG). Benefits are expected not only in the Financial Services Industries but also in other industries like Space & Defense, Automotive and Healthcare to quote a few. For now, as technology maturity has not yet been reached, participants to the Quantum Computing ecosystem (researchers, academics, startups and corporations) are essentially in a collaborative mindset. Despite much debate as to when the technology will be ready, a precipitous breakthrough cannot be ruled out. This could bring gate model based universal Quantum Computer ready for commercial use as early as in 3 years’ time.
In a third part, QuantFi has graciously shared the outcomes of their world tour, conducting hearing with major financial institutions ( banks, brokers, asset management, insurance ) in the US, Europe and Asia. While some financial Institutions have been studying Quantum Computing for several years, it is to be noted that most of the major participants are just starting building their Quantum Computing teams.
Common research themes from interviewed financial institutions include: crashes and market trends detection, portfolio management-related use cases such as real-time goal definition, optimization, arbitrage or also risk management topics including for instance derivatives pricing, VaR and fraud detection.
The last part focused on an extrapolation over Quantum Computing readiness for commercial use. Some key parameters to monitor (e.g. Number of physical qubits, Qubit lifetime, Gate fidelity and Gate operation time) were presented as a way to assess the increase in maturity of universal Quantum Computers.
The seminar ended up with an active Q&A session where questions on several topics were discussed with the audience, including a potential Quantum “winter”, the path to start a Quantum Computing research project, the state of Quantum Computer simulators, the coding differences between traditional computers and Quantum Computers, as well as the need for toolsets .
Presentation material can be found here.
