UBS’ experimentation with quantum computing for trading found no significant advantage over existing technologies, according to its former head of data.
Quantum computing is still in its infancy and UBS’ experiences demonstrate how FinServs’ efforts may not lead to any real-world products. Still, the experimentation is worth it for the skills-building and research.
UBS abandoned its efforts to use quantum computing for trading, because the technology didn’t provide any substantial advantage, its former chief data officer, Lee Fulmer, said at a recent conference.
Quantum – an emerging computing paradigm that promises to perform calculations at blistering speeds – is still in its experimental phase. And those experiments don’t always work out, per Fulmer’s experiences.
UBS was trying to use quantum computing to speed up the bank’s existing trading models in order to “give us a competitive advantage,” he said. “In investment banking you live and die by microseconds: The end result of all of that effort was that we found we weren’t getting a substantive uplift.”
Fulmer left the firm in March, but his sobering perspective shows why early experimentation is crucial in shaping an overarching quantum strategy: Certain domains may never benefit from quantum computing, but it’s better to try and fail to find an advantage than to be left behind.
As Insights Distilled has previously reported, other FinServs are testing quantum in other areas of their businesses with varying results:
Credit Agricole successfully completed two real-world experiments earlier this year that found it could achieve “faster valuations and more accurate risk assessments” using quantum techniques, while Banque de France is preparing to protect itself against encryption-breaking quantum tactics. Mastercard, meanwhile, is experimenting with ways to use quantum computing to improve its loyalty and rewards program, and HSBC, JPMorgan, and Ally have their own tests, too.