Quantum computing - the competitive advantage

The field of quantum computing started almost 40 years ago back in the early 1980s. However, it is only in the last couple of years that quantum computing has become available to ‘everyone’ – even if we are just at the very beginning of this multiple decade adventure. 

Quantum computers differ from classical super-computers by harnessing the power of sub-atomic particles to speed up processing. In certain scenarios, they are 100m times faster at solving problems than conventional computers. Quite how we harness the power of these phenomenal systems is still yet to be fully understood but exciting developments are taking place all the time. In October 2019, Google AI, in partnership with NASA, claimed to have performed a quantum computation that would have taken a conventional computer thousands of years to solve - prompting the concept of ‘quantum supremacy’. 

So why does the investment management industry need to start thinking about quantum computing?

2020 certainly demonstrated the need for our industry to adapt and evolve. The pandemic has meant the way we do business has changed forever, and technology is at the heart of survival. We now live in a data-rich world and the need to access, analyse and utilise information for competitive advantage will continue to grow. We are already seeing the complexity and size of data increasing and ever-more powerful computers are essential to crunch these vast amounts of data at superfast speed.

For our industry, being able to effectively analyse large or unstructured data sets will continue to extract real competitive advantages. Applying cutting-edge technologies such as quantum computing could allow faster and more accurate decision-making, for example determining an optimal investment portfolio mix. Quantum computing also holds great promise in the areas of machine learning and artificial intelligence. To date there has been little uptake among investment managers primarily due to cost, but the ability to rent computer firepower through the cloud will surely see an increase in interest and engagement. 

As an industry, we need to embrace the quantum revolution. Indeed, Neven’s Law states, “quantum computing is experiencing doubly exponential growth relative to conventional computing.” If this law proves true, we can expect to see huge advances in quantum computing over the next decade and what you did yesterday will not be sufficient for tomorrow. 

Gartner predicts by 2023, 20% of organisations will be budgeting for quantum computing projects, compared to less than 1% today. Our industry needs to investigate the opportunities and be part of the transformation, not a casualty of the change. 

For more information on this topic, you can access a recording of our latest TechTalk on quantum computing in investment management here.