Quantum computing helps financial services organisation improve portfolio optimisation
A joint team of quantum computing engineers and financial analysts at this industry leader in digital financial services, led by a forward-thinking CIO, knew they wanted to take advantage of quantum computing to solve unique challenges that could not be handled with classical computing alone.
This company sees value in preparing to be “at the ready” when quantum computing machines become more powerful. So, they devised a proof-of-concept (POC) project centered on financial index tracking, an essential application of portfolio optimisation used by financial firms for asset management strategies or for creating and managing new financial products such as exchange-traded funds (ETFs). A POC is a smart choice for a team looking to invest wisely in quantum computing as it allows the team to safely experiment and develop solutions in tests now that can be deployed as quantum machines become more powerful.
Financial indexes often consist of hundreds of thousands of assets and an important task to make it practical to manage such portfolios is replicating the financial index using a limited subset of assets, known as cardinality constraints. Such a constrained portfolio optimisation is extremely difficult to solve using classical computing, and standard algorithms tend to have difficulty finding appropriate solutions.
This industry leader in digital financial services wanted to use quantum computing to solve unique asset management challenges that classical computing could not handle
This client sees value in being prepared to act quickly when quantum computing becomes more powerful. They devised a proof-of-concept project centered in financial index tracking
Protiviti partnered with this client to develop a way around the classic cardinality-constraint issue using quantum annealing, a specialised type of quantum computing excellent at optimisation problems
This significant innovation in the financial services industry introduced an algorithm that reduced overhead costs while keeping customer fees low
This project demonstrates that quantum computing provides a path to deliver performance, accuracy and analysis for faster, better and less expensive capabilities.