QUANTUM COMPUTING
Quantum computing applies the foundational theories of quantum physics to computers. Essentially, instead of regular binary computer bits, which can represent two singular values 0 or 1, quantum computers use special quantum bits which can process multiple pieces of information simultaneously. The result is a large input capacity and a fast operating speed that makes quantum computers more accurate and efficient than traditional computers. As such, testing has shown that these machines can run programs and solve problems more effectively than commercially used computers.
The aforementioned special properties of quantum computers make them highly useful for many sectors of finance, a few of which include:
Corporate Banking: When giving out loans, one crucial consideration for corporate banks is risk. Utilising quantum computers and their problem-solving power, can enable banks to automate significant decisions like these, making the process much more efficient.
Investment Banking: As one of the most high-risk, large-scale financial sectors, investment banking requires big tasks like portfolio optimisation and derivative pricing for deals. Quantum computing can provide highly accurate outcomes in these scenarios, creating larger capital gains and facilitating a more effective asset allocation.
Cybersecurity: Cybersecurity is an increasingly prevalent topic nowadays, as fraud targeted towards financial institutions becomes more common and scamming strategies become more sophisticated. Once again, the ability for quantum computers to factor a wide range of variables means that fraud-detection could become more precise in the future.
According to McKinsey, by the time fully-functioning quantum computers are available, these machines could create $622b USD in value. Whilst quantum computers are a recent invention and are still primarily used for scientific research purposes, there is a definite possibility for financial institutions to adopt them in the future.
CLOUD COMPUTING
Cloud computing involves various computing and IT services, such as file sharing, website development software, and data storage, being readily available on the cloud for anyone to use. So instead of having to pay to install different programs, users can essentially ‘rent’ these services, paying for use rather than ownership.
The opportunities for businesses currently using cloud computing demonstrate that the impacts are huge. Factors like cost, speed, and scale are made more efficient and businesses can accelerate their online development much more rapidly.
Cost: One of the main benefits that businesses gain from cloud computing is reduced costs, as they don’t have to invest large sums into technology infrastructure. Instead, they are able to leverage the flexible ‘rental’ approach and are charged by usage. This enables businesses - particularly small businesses - to develop online programs at a much more affordable level.
Scalability: With cost-flexibility also comes more effective scalability of resources. Financial institutions and businesses have constantly changing needs as they work to tailor customer-experience. As such, rather than facing the issue of too few technological resources or too many, they can easily adjust using cloud computing where resources are readily available.
Speed: Having access to a wide range of cloud-based platforms and programs increases efficiency of operations for businesses. Developers have the ease of making changes to systems and seeing the effects update almost immediately. What this means is much faster rollout of new services - for instance, new features like Live Chat being added to online banking platforms.
Cloud computing technology is already common nowadays, with 44% of financial institutions storing their data in the cloud, - a figure that is likely to rise in the years to come. Key businesses which utilise cloud computing include commercial banks – especially for their online platforms – investment management, insurance and cybersecurity.
Comments