A computing which is done using quantum-mechanical phenomena is Quantum Computing and is performed through quantum computers. Every computing system relies on input data and manipulation of this data through some means. For example, our current computers store the information in the form of binary data- 0 and 1. Quantum computing works on similar fundamentals. Only the difference is that in quantum computing, the information is processed by applying the properties of quantum physics on the data. This sort of computing is done using special hardware and software set, better known as quantum computers. These computers use different physical phenomena such as superposition, interference, and entanglement to process and manipulate the information. In current regular computers where we use binary bits to store and manipulate the data whereas quantum bits or qubits are used for the same processing in quantum computers.
This difference allows the quantum computers to work upon and solve complex mathematical problems like finding the very large prime number and factoring large numbers, problems which current regular computers can’t solve. So basically, a quantum computer will help us find a solution for the problems which are too difficult to solve using current computers.
Our present day cryptography is dependent on the concept of factoring the big numbers as it understands that factoring big numbers is a difficult process. Even RSA encryption used when you buy using a credit card is based on the same concept. For example, when you buy online, the website provides you with a large “public key” to encode credit card information which is also dependent on the factoring of large number concept. This key is generally a product of two very large prime numbers. The seller or website protects or does not let anyone know these prime numbers to keep your credit card information safe. As the quantum computer can be used to find out large prime numbers, it can easily be used to hack your account. But one does not need to worry as nowadays, classical cryptography is also matching the high standards of quantum cryptography and hence only a few aspects of classical cryptography are at risk.
Moreover, quantum computing itself can be used to generate highly secured cryptography codes which can keep your data safe. Quantum Key Distribution (QKD) can also be used for data security and can be used for the distribution of random keys at a large distance. Definitely, the continuously progressing research in quantum computing will bring in more opportunities to make our payments more secure.
Apart from these security applications, quantum computers can also be used for “Portfolio Risk Optimization”. There are several factors and multiple rebalances involved in this optimization considering all of which forms complex polynomial equations. But due to the inability of our computers to solve these equations we have to ignore some of the factors. Now the latest developments in quantum computing might be able to give us a solution for this and help us optimize the risk of our portfolio. Quantum computing can also be used for the clustering of the assets which can be helpful in asset performance calculations, risk and customer sentiment analysis. It will also perfect the scenario analysis results and ease the option pricing.
It is true that until recently, quantum computing existed just in theory and majority of the progress and technology development done in this field is the result of developments in past few years. But it is evolving slowly to become an area of interest for the tech giants and big banks as witnessed by recent deals done in the industry and it is believed by many thought leaders that quantum computing can solve many business problems across industries.