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Quantum algorithms that speed up banking operations 100x are here.

Multiverse, a Spanish firm, is providing the software to BBVA and Bankia.

An algorithm is a step-by-step process for performing a computation or a set of instructions for solving a problem, with each step being computer-based. As a result, if an algorithm can be executed on a quantum computer, it is a quantum algorithm. All classical algorithms can be performed on a quantum computer in theory. The phrase quantum algorithm, on the other hand, refers to algorithms with at least one distinctively ‘quantum’ phase, such as superposition or entanglement.

Quantum Computing in banking

Forget what Goldman Sachs claimed about quantum computing becoming useful in banking being five years away. According to Spanish firm Multiverse Computing, banks can already gain a 100-fold advantage by employing quantum computers to handle problems like portfolio optimization and fraud detection fraud.

The startup, which today announced a €10 million seed round, has built quantum software that it sells to companies including BBVA, Bankia, the European Tax Agency, and the Bank of Canada.

“For problems like optimising investment portfolios and detecting fraud, quantum computers can already outperform classical computers.”

“It depends on the problem you are trying to solve,” says Enrique Lizaso, chief executive.  “For some problems like optimising investment portfolios and machine learning to detect banking fraud, quantum computers can already outperform classical computers today.”

Even while today’s quantum computers are still somewhat limited, with less than 100 qubits and high error rates, tasks like these can be completed 100 times faster using quantum rather than classical computers.

According to Goldman Sachs, which has been collaborating with quantum startup QCWare to test out practical applications, quantum computing will take machines with 7500 qubits and another five years to be of practical use to the financial services industry. To be practical, according to Jeremy O’Brien, CEO of photonic quantum computing company PsiQuantum, quantum computers must reach 1 million qubits, which he believes is a decade away.

However, Multiverse claims that by focusing on issues that are ideally suited to quantum computers, it is possible to achieve quantum advantage even with today’s small, error-prone machines.

On the back end, the San Sebastian-based company links the algorithm to a specific sort of quantum computer that is most suited for the challenge. D-machines, Wave’s for example, excel in optimisation issues, whereas IBM and IonQ’s quantum computers excel at machine learning, according to Lizaso.

Other types of issues, such as pricing complex financial instruments (which relies on running so-called Monte Carlo simulations, which QC Ware and Goldman Sachs were looking at) or large-scale simulations, can still be difficult to address using quantum computing. Quantum computers with a larger number of qubits are anticipated to be required for these.

“Imagine an early computer in the 1970s and asking it to be able to recognise voice and search the internet — it would be impossible. But you could use it to run a spreadsheet.”

“Imagine an early computer in the 1970s and asking it to be able to recognise voice and search the internet — it would be impossible. But you could use it to run a spreadsheet, it would still be useful. That’s what it is like with quantum computers today,” says Lizaso.

Multiverse wants to grow swiftly, given the severe competition in the business to acquire great staff and secure connections with the biggest clients. The company plans to expand the service into other industries, such as energy, and increase employment from 27 employees now to close to 50 by the end of the year, and more than 200 by 2027. The company intends to raise an additional €50 million next year.

“You have to grow like hell at the moment.”

“At the moment, you have to grow like crazy,” Lizaso adds, pointing out that many of Multiverse’s competitors are huge tech stalwarts like IBM and Google, and that quantum software rival Cambridge Quantum Computing just joined with Honeywell to beef up its firepower.

Quantonation, EASO Ventures, Inveready, Mondragón Fondo de Promoción, Ikerlan, LKS, and Penja Strategy were among the investors in Multiverse’s seed round, which was led by JME Ventures.

Quantum algorithms are extremely powerful.

Quantum algorithms cannot answer problems that are essentially intractable by conventional algorithms (so-called undecidable issues). Quantum algorithms have the advantage of being able to solve some problems much quicker than traditional algorithms. Shor’s and Grover’s algorithms are the two most well-known examples. Shor’s algorithm is a quantum integer factorization method. Simply stated, it will determine the prime factors of an integer N. It is exponentially quicker than the most well-known classical algorithm for solving this issue. Grover’s approach is quadratically quicker than the best classical algorithm for this purpose in searching an unstructured database or unordered list.

Written by IOI

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