NatWest begins testing with quantum computing power to help solve highly complex calculations
Quantum computers can solve problems in just a fraction of the time that traditional computers could take years to complete.
19 Sep 2018
NatWest has begun testing with quantum computing power in order to solve some of the most complex, challenging, time consuming and expensive problems that the bank faces.
Using ‘quantum-inspired’ computing power, the bank’s technology team have completed a highly complex calculation that needs to be undertaken regularly by the bank, at 300 times the speed of a traditional computer, whilst providing an even higher degree of accuracy.
Quantum-inspired means that quantum algorithms are used to solve a problem, but qubits are not actually used in the process. Until very recently the hardware required to process quantum algorithms were not available to companies.
The experiment, which after successful testing is now being implemented by the bank, will see quantum-inspired computing power used to help portfolio managers decide on the right composition for the bank’s £120bn high quality liquid assets (HQLAs) portfolio. HQLAs are assets such as cash and bonds that every UK bank must hold as a buffer in case it runs into financial trouble.
Given the early success of testing, it is now thought quantum computing power could dramatically change the way many processes are undertaken at NatWest and the bank is now looking at what other portfolios can be calculated using the same technology. For instance, portfolio managers could be able to adjust the allocation of assets following a surprise movement in the market, in a much shorter space of time than normal.
The hardware used in testing has been Fujitsu’s quantum-inspired Digital Annealer, whilst the quantum software is provided by 1QBit – of which NatWest is an investor and board observer. This strategic relationship has provided NatWest with unparalleled insights and access to remain at the forefront of this emerging technology.
Quantum technology could also be applied to optimise the bank’s other portfolios, and could enhance other areas such as:
Anomaly detection – quantum-powered unsupervised machine learning could be used to help detect fraud and spot money laundering with enhanced speed and scale, offering the possibility of dramatically reducing the amount of money lost to criminal activity.
Supercharged AI – machine learning could begin to reach a much higher level of performance when combined with quantum computing. In the case of reinforcement learning, it will be able to reduce the training time - an expensive exercise with a classic computer - and will lead to significant improvement in the optimisation of outcomes. An example in banking could be risk management, AI trading, or chat bot customer service.
Software verification – quantum technology could give the bank the ability to verify and validate its IT systems much more quickly and cheaply, whilst reducing the risk of outages as the number of defects is reduced dramatically.
Andrew Fursman, CEO of 1Qbit, said: “The more we explore the potential uses for quantum and quantum-inspired hardware, the more we discover new methods which have the potential to impact many diverse industries. Because of quantum computing's highly publicised relevance to decryption and the many relevant applications of encryption across a broad range of financial activities, banking was one of the first industries to invest in quantum processing. At 1QBit, we are now demonstrating that the combination of quantum-inspired hardware and novel methods of machine learning can produce new state of the art advancements in AI, providing benefits not just to the finance industry, but across a broad range of human endeavours. For the first time, we have the hardware and software necessary to apply our work to industry scale problems, and we look forward to seeing the far-reaching implications of the advancements enabled by these early collaborations.”
Kevin Hanley, Director of Innovation at NatWest said: “We’re really excited about the possibilities that quantum computing presents us with. Given our first application of quantum computing power has been so successful we think the technology could be applied to many other calculations and problems the bank faces on a daily basis. In the long run, quantum computing could completely change the way banks operate, making them much more efficient and cheaper to run, which in turn would mean customers benefit from better deals and improved service.”
David Snelling, Program Director of Artificial Intelligence at Fujitsu, said: “NatWest confirms the real-world demand to use the Fujitsu Digital Annealer, a quantum-inspired technology, to support its management of liquidity, even in fluctuating, uncertain markets. The key strength of the Digital Annealer is its ability to calculate optimal solutions from an enormous number of feasible options. In practical terms, this means NatWest gets optimal returns from safe HQLA investment portfolios. By using quantum-inspired computing technology in this way, NatWest is pioneering a new approach to banking.”