Quantum Computing Use Competitive Analysis
Barclays, Goldman Sachs and Wells Fargo are three additional financial technology companies that are currently developing use cases in the area of quantum computing. Notably, these organizations have reported mixed results with practically applying this technology in financial services, and do not appear to be using quantum computing within production systems/services at present.
- Overall, Barclays asserts that it wants to be "quantum ready," while acknowledging that the future of quantum computing in financial services and technology remains "unknown."
- Despite the opaque nature of quantum computing and its potential applications, Barclays currently states on its corporate website that it "concluded that quantum computing’s potential was so great that we should commit to an initial program of research and development."
- Barclays adds that it has therefore undertaken "in-depth experimentation" of the technology, with the "twofold" goal of understanding the potential of quantum computing in the banking industry overall as well as determining how Barclays specifically might leverage the technology for commercial purposes going forward.
Key Use Cases/Applications
- Barclays began exploring quantum computing in 2017 by applying the technology to optimize pervasive problems faced in financial services.
- Specifically, the company converted each of several identified optimization problems in banking into a "simple abstract description" such as "searching, sorting, factoring or solving linear equations."
- Since then, Barclays completed a use case of quantum computing to help optimize the settlements process for securities transactions.
- Barclays is "directly working" with IBM on its quantum computing use cases, including the settlements project discussed above.
- A review of Barclays' owned media channels, executive interviews, white papers and media coverage specifically related to its quantum computing efforts indicates that the bank has two primary messages related to the technology: it represents a tremendous opportunity for financial services but also comes with risks that must be actively mitigated.
- Some of the phrases used by Barclays' to describe the opportunity represented by quantum computing include: "it could transform daily life," "the technology will change our lives" and it could "help us solve certain problems more efficiently than could ever be possible."
- In parallel, the company highlights the importance of "risk mitigation" and the responsibility of institutions that are exploring this technology to ensure that "safety for our clients, partners and business" is the top priority when moving forward.
- Notably, Barclays has deployed a variety of communication tactics in sharing its journey to date with quantum computing, and appears to be actively promoting its recent efforts.
- Not only does the company dedicate substantial discussion on its corporate website to the subject, but it has published a white paper in partnership with IBM related to its settlements use case, regularly encourages Barclays Director of Research and Engineering Dr. Lee Braine to participate in interviews that highlight the company's focus on quantum computing and contributes to other related media coverage.
- Although Goldman Sachs has been publicly speaking on the topic of quantum computing in financial services as early as 2017 and 2018, any formal positioning statements related to the financial technology firm's use of this innovation have been limited.
- However, Goldman Sachs Global Head of R&D Engineering Jeremy Glick asserted publicly this year that the company views quantum computing as a "longer-term" project, wherein the current focus is on fostering communication and other forms of collaboration between banks and "quantum experts."
- This public statement appears to be corroborated by the company's posting last year for the "Leader of a new quantum computing research team in R&D Engineering."
- Notably, this position has two key goals: (1) to identify applications for this new technology across Goldman Sachs and (2) to liaise with clients, Goldman staff and academics on the subject.
Key Use Cases/Applications
- Goldman Sachs has been researching the potential applications for quantum computing in financial services since 2015.
- These projects have most notably included an exploration of how quantum computing can be leveraged to "speed up financial calculations and artificial-intelligence-based decision-making," with the Monte Carlo computational algorithm as an initial use case.
- However, Goldman Sachs reported in 2020 that this first significant test of quantum computing was unsuccessful, given that Monte Carlo simulations could not be "parallelized on a quantum system."
- Moving forward, the company is shifting its research efforts to determine how to "decrease the depth of quantum circuits to handle the simulations."
- Goldman Sachs initially partnered in 2019 with QC Ware to explore its initial use case for quantum computing in the area of Monte Carlo simulations.
- Notably, Goldman Sachs not only inked a formal work arrangement with the company, but also became a lead investor in the software startup.
- Since then, the financial technology firm has expanded its collaborations in quantum computing to include a new deal with IBM in May 2020.
- Goldman Sachs' key messages related to quantum computing have shifted significantly over the past few years.
- As recently as 2018, the financial institution referred to the technology in technical and somewhat abstract terms as a "completely different computing model."
- However, Goldman Sachs is now discussing quantum computing as an innovation that is on the "brink of a rapid acceleration" in financial services, which likely will become a "critical technology" to stay competitive in the industry.
- Although Goldman Sachs has consistently spoken on the subject of quantum computing as early as 2017, these mentions have generally been more limited and from a research/analyst perspective.
- However, as recently as 2019 and 2020, Goldman Sachs leaders including Global Head of R&D Engineering Jeremy Glick and Senior Researcher Paul Burchard have begun to more formally and publicly discuss the role that the company envisions for quantum computing at the company.
- Meanwhile, it appears that Goldman Sachs intends to launch a broader "client facing" and potentially market facing communications strategy on the subject through its new head of quantum computing research, per the associated job posting.
- Wells Fargo has published only limited references to quantum computing across its owned media channels; however Wells Fargo Chief Technology Officer Saul Van Beurden publicly referred to the company's positioning statement on this new technology in 2019.
- Specifically, Wells Fargo's goal related to quantum computing is to "test and learn" about this innovation, so that it can better understand its optimal use cases and potential impact on the financial services sector.
- Mr. Van Beurden added that while many in his industry believe that quantum computing will "never come to production" or will take "10 or 15 years" before practical applications are possible, Wells Fargo views quantum computing as a "game-changing impact" on financial services and wants to ensure that it doesn't have "regrets" about moving too slowly on the technology once this "wave starts to take off."
Key Use Cases/Applications
- Although the company has been public in its pursuit of quantum computing, Wells Fargo has been reticent to share details related to its current use cases.
- Mr. Van Beurden has publicly stated that Wells Fargo is dedicating several "data scientists and Ph.D.s in quantum computing" to explore the areas where the company has its "first hypothesis" and use cases in mind.
- However, Wells Fargo has not disclosed the specific areas of focus within these initial research efforts.
- This past November 2019, Wells Fargo and IBM announced a formal, multi-year collaboration in both the areas of quantum computing and artificial intelligence.
- As part of this partnership, Wells Fargo joined the IBM Q Network and gained access to the MIT-IBM Watson AI Lab.
- Although Wells Fargo separately reported that it has included MIT within this collaboration, specific project details have not been publicly reported.
- Overall, Wells Fargo is asserting that quantum computing has the potential to revolutionize the financial services industry, and that these lasting impacts will likely occur in the near term.
- However, Wells Fargo Head of Innovation Lisa Frazier cautions that "new technologies like quantum computing" are just "one piece of the puzzle," and that the bank must ensure that it is "using the right tech at the right time" so that it is making "something better" for its customers.
- Compared with other major financial technology firms that are using quantum computing (e.g., Barclays, Goldman Sachs), it appears that Wells Fargo has taken somewhat of a conservative/limited communications approach to sharing its work related to this emerging technology.
- Apart from brief statements by leadership as well as press coverage of its deal with IBM and MIT, Wells Fargo has largely remained silent on the topic.
- However, recent job postings for quantum computing positions at the company have made references to potential future communications plans/tactics, specifically targeting "research labs and academic institutions" as well as "conferences and industry associations."