Quantum Computing Applications in the Financial Services Industry: End-User Cases and Market Forecasts

In late 2019, Bank of America claimed quantum computing “would be as revolutionary in the 2020s as smartphones were in the 2010s.” Goldman Sachs was quoted in January 2020 saying quantum computing has the potential to become a critical technology in the financial services sector. Other big banks have made commitments to quantum computing including JPMorgan, Citigroup and Wells Fargo as well as some European and Asian banks. Insurance companies, credit card companies, financial consultants and hedge funds are also interested. Many financial service firms are already taking on sizeable staffing of people experienced in the overlap of quantum technology and financial industry activity.

This report describes the opportunities, challenges and deployment options surrounding the application of quantum computing in the financial services vertical. It discusses in detail the role that quantum computing plays in portfolio management and construction, currency arbitrage, fraud detection, trade settlements, analytics-driven CRM, credit scoring, risk modeling, tax-loss harvesting and derivative pricing. The report also takes a look at quantum computing’s role in accelerating the use of AI and machine learning in the financial services sector.

The report provides a ten-year forecast of what the banking and financial services sector will spend on quantum computing in the next decade, and it discusses the evolution of quantum computing in the financial services sector from the current “proof of concept phase” to widespread usage in a decade or so. The report looks at smaller and less-expensive quantum computers that could, for example, be used in smaller financial institutions and in the role of network computers in transaction networks.

This report concludes with a review of the current plans of what the leading full-stack quantum computers are doing in the financial services space. It also provides a focus on sales strategy to sell banks and other financial institutions on using quantum computing