Exploring quantum experiments in financial services

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EMERGING TECH PROJECT

Exploring Quantum Computing with Amazon Web Services

By: ADAM SCHOUELA | August 13, 2020

This Quantum-to-Quantum PoC showcases the ability to optimize the use of different quantum technologies, and also features a hardware-agnostic approach which enables Fidelity to easily switch to new quantum systems as they become available.

The Challenge

Research has shown the potential for quantum computers to achieve a quadratic speedup when compared with classical computers for problems like option pricing. While this speedup might not be achievable in all aspects using the quantum computers available today, it is important for FCAT to experiment with this technology to make sure that we are prepared for a time when quantum computers are commercially viable. There are a number of different quantum computer devices on the market today, each with their different strengths and weaknesses. We need to understand those strengths and weaknesses so that we can understand if or how they can be combined to solve problems.

The Value

FCAT worked with the Quantum Solutions Lab at Amazon to create a Proof of Concept that pushes the boundaries of what is possible today with cloud-based quantum computers. The Amazon Braket service allows FCAT developers to develop hardware agnostic code and change quantum computing backends through a single line of code change. This allows FCAT to research the strengths of different quantum backends and build hybrid workflows.

What We Learned

Amazon Braket is a flexible platform that provides FCAT developers the opportunity to explore the advantages and disadvantages of some currently available quantum computing technologies. It is not clear which quantum computing approach will emerge as the leading solution in the future. FCAT must keep all options open, explore all current solutions simultaneously, and experiment to determine which impact the different approaches have on various use cases.

Team & Tech

The Amazon Braket service was used for developing the code and accessing the quantum backends. The annealer used was the D-Wave 2000Q system. The gate-based computer was the Rigetti Aspen-8.

Next Steps

We believe now is a good time to engage with this emerging technology because current NISQ (Noisy Intermediate-Scale Quantum) devices enable us to research and understand the technology as we define appropriate use cases. We can also use this time to upskill our employees on how to think through quantum algorithms and write programs for a quantum computer. Our mission is to understand how quantum computing might impact Fidelity’s business and customers so that as soon as the technology is ready we fully leverage the benefits.

The Deep Dive

Innovative exploration in a fast-evolving quantum world

The Fidelity Center for Applied Technology utilized Amazon’s Braket service to develop hardware-agnostic quantum algorithms that capitalize on the individual strengths of different quantum technologies in a hybrid quantum environment.

FCAT’s Exploration of Quantum Computing

While it is unclear when quantum computers will reach their full potential, research indicates that there is potential for quantum computers to displace classical computers in the future with significant benefits for financial services firms. At FCAT, we experiment with emerging technologies to identify how they might impact Fidelity’s business and customers. We are researching quantum computing with the objective of being ready when this emerging technology becomes commercially viable.

Additionally, we seek to encourage a mind shift from classical thinking towards “quantum thinking” throughout the organization. As a part of this journey we are exploring a wide variety of quantum computing technologies that currently exist and building Proof of Concept prototypes that are interesting to Fidelity and our customers. We believe now is a good time to engage with this emerging technology as current NISQ (Noisy Intermediate-Scale Quantum) devices enable us to understand the technology and define appropriate use cases as we upskill our employees on how to develop for a quantum computer.

Synthetic Security Creation and Option Pricing

FCAT teamed up with Amazon’s Quantum Solutions Lab to create a Proof of Concept that pushes the boundaries of what is possible today with cloud-based quantum computers. FCAT developers used Amazon Braket to develop a hybrid quantum-to-quantum algorithm for a potential asset management use case.

For this use case, we developed a custom binary quadratic model (BQM) that evaluates a list of potential stocks to determine which mix of those stocks would yield a synthetic security whose cumulative attributes match those of the specified target index. This BQM was then sent to a quantum annealer to find the optimal composition of this new security. Once the composition was determined, the results were then sent to a gate-based quantum computer which used amplitude estimation to calculate the prices of options on that security.

This PoC showcases the potential of using different quantum technologies in concert as well as a hardware-agnostic approach which enables Fidelity to easily switch to new quantum systems as they become available. We are still in the early days of quantum computing, but the technology has already shown potential to displace technologies that we use today. This approach positions FCAT to maximize quantum computing capabilities by nimbly switching to the latest best-of-breed quantum systems as they evolve.

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This website is operated by Fidelity Center for Applied Technology (FCAT)^® which is part of Fidelity Wealth Technologies, LLC, a Fidelity Investments company. FCAT experiments with and provides innovative products, services, content and tools, as a service to its affiliates and as a subsidiary of FMR LLC. Based on user reaction and input, FCAT is better able to engage in technology research and planning for the Fidelity family of companies. FCATalyst.com is independent of fidelity.com. Unless otherwise indicated, the information and items published on this web site are provided by FCAT and are not intended to provide tax, legal, insurance or investment advice and should not be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any security by any Fidelity entity or any third-party. In circumstances where FCAT is making available either a product or service of an affiliate through this site, the affiliated company will be identified. Third party trademarks appearing herein are the property of their respective owners. All other trademarks are the property of FMR LLC.

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