The news: Ally Financial partnered with Multiverse Computing to explore creating investment portfolios using quantum computing—yet another instance of a bank joining the quantum computing race.
What is quantum computing? The technology requires special quantum computing machines that can solve more complex problems than a traditional computer is capable of solving.
Why are banks investing in quantum computing? Many banks have started working on quantum computing projects that could one day become part of their normal operations. The speed-up in computing time is applicable to many problems in financial services.
Quantum computing offers a competitive advantage: Banks and financial institutions that are able to implement it in their daily practices could get a leg up on their competitors.
What are the challenges of implementing quantum computing? It’s a young technology that was first studied in the early 1980s. Quantum computers are generally designed to solve very specific problems, and they are sensitive to any kind of disturbance, like noise and dust. Banks also face some hurdles in seamlessly implementing the technology.
Which banks are using quantum computing? Worldwide spending on quantum computing is expected to reach $630 million by 2027 and $2.2 billion by 2030, according to Inside Quantum Technology. Here are some banks that have already jumped in, and what they are doing:
Our take: Many experts estimate commercialized use of quantum computing is still about a decade away. The hurdles banks face in its adoption will resemble the challenges they’ve had to overcome when migrating their mainframe system to the cloud—like service disruptions, legacy technology barriers, and resistance to buy-in for long-term projects. That means banks need to start preparing for the technology now.
This article originally appeared in Insider Intelligence’s Banking Innovation Briefing—a daily recap of top stories reshaping the banking industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.