Editorial Feature

How Could Quantum-Powered AI Transform Payments?

One technology set to transform the banking sector is Quantum Artificial Intelligence (AI), which combines the unmatched processing capabilities of quantum computing with AI algorithms. 

How Could Quantum-Powered AI Transform Payments?

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This integration offers financial institutions a remarkable opportunity to enhance financial processing, risk modeling, payments, and cryptography to new heights of accuracy and security, providing a significant advantage in the industry.

What is Quantum Computing?

Quantum computing uses specialized technology, such as computer hardware and algorithms, that leverages principles from quantum physics to solve complex problems beyond the capabilities of conventional computers or supercomputers.

Unlike classical computing, which operates with binary bits (0 or 1), quantum computing utilizes quantum bits (qubits), allowing them to exist in multiple states simultaneously. This ability gives quantum computers a significant processing advantage.

Qubits, the fundamental units of quantum computing, can be represented by particles like electrons or photons. These particles exhibit unique properties such as entanglement and superposition.

Qubits in superposition are those that are in all configurations simultaneously. Given that qubits can superimpose 0 and 1, a quantum computer can do 2n operations, where n is the number of qubits it uses. For example, a 500-qubit quantum computer can perform up to 2500 calculations in a single step.

Entanglement, another fundamental concept in quantum physics, enables qubits to interact instantly over large distances. As long as the associated particles are isolated, they stay entangled, regardless of how far apart they are.

Quantum Computing and AI in Finance: Enhancing Security and Innovation

By combining the power of quantum computing with AI, banks can discern subtle patterns and trends previously inaccessible due to computational limitations. Risk modeling is crucial in banking, aiding organizations in identifying and mitigating financial hazards.

Quantum AI, harnessing the vast computational capacity of quantum computing, facilitates the creation of more reliable and accurate risk models by analyzing large datasets and variables. As a result, banks are better equipped to make informed decisions, minimize risks, and adeptly manage their portfolios. 

Financial institutions must also maintain the highest level of security as they handle extremely sensitive consumer data and transactions. Traditional encryption techniques could be compromised by quantum computing, making them more susceptible to attacks. Quantum AI can leverage the potential of quantum computing to create innovative and secure encryption techniques that can withstand quantum attacks. This development in cryptography gives banks a competitive advantage in safeguarding their clients' information, stopping fraud, and retaining client confidence in their offerings.

Quantum computing also offers banks a more efficient avenue to analyze extensive or disorganized data sets, enhancing decision-making and customer service. AI systems can conduct comprehensive risk assessments, streamline loan approval processes, and optimize investment portfolio combinations. AI empowers banks to deliver cutting-edge digital banking services, encompassing account management, checking facilities, and customer support.

For example, HSBC and Quantinuum are collaborating on a multi-phase initiative exploring various quantum applications, including fraud detection, natural language processing, and cybersecurity. Similarly, Truist and IBM are working together to investigate the possibilities of quantum computing in the banking industry. IBM will provide Truist with access to its quantum computing resources, enabling joint exploration of applications ranging from environmental objectives to risk and fraud detection and prevention, as well as pricing and portfolio optimization.

Future Outlook

Quantum computing and AI are set to revolutionize various industries in the coming decades. A recent benchmark experiment shows that quantum-powered applications may become commercially viable in the next two years. For instance, a Google quantum experiment completed a calculation that would have taken the fastest supercomputers in the world 200 seconds to complete, highlighting the potential of quantum computing to drastically expedite computations.

Quantum AI technology is set to completely transform the banking industry by simplifying complex financial computations, improving risk modeling, and strengthening cryptography. The combination of advanced AI algorithms with the unparalleled processing power of quantum computing can provide banks with a significant competitive edge, facilitating quicker, more accurate decision-making and increased security.

More from AZoQuantum: The Quantum Financial System: What to Know?

References and Further Reading

Gillis, AS. (2023). Quantum Computing. [Online] TechTarget. Available at: https://www.techtarget.com/whatis/definition/quantum-computing#:~:text=Since%20qubits%20take%20a%20superposition,calculations%20in%20a%20single%20step.

Egger, DJ., et al (2020). Quantum Computing for Finance: State-of-the-Art and Future Prospects. IEEE Transactions on Quantum Engineering. doi.org/10.1109/TQE.2020.3030314 

Orús, R., Mugel, S., Lizaso, E. (2019). Quantum computing for finance: Overview and prospects. Reviews in Physics. doi.org/10.1016/j.revip.2019.100028.

PYMNTS. (2024) The Impact Quantum-Powered AI Could Have on Payments. [Online] PYMNTS. Available at: https://www.pymnts.com/news/artificial-intelligence/2024/the-impact-quantum-powered-ai-could-have-on-payments/.

Prakash, S. (2023) Quantum AI in Banking: A Paradigm Shift Enabled by Quantum Computing. [Online] Linkedin. Available at: https://www.linkedin.com/pulse/quantum-ai-banking-paradigm-shift-enabled-computing-surya-prakash/.

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Written by

Ilamaran Sivarajah

Ilamaran Sivarajah is an experimental atomic/molecular/optical physicist by training who works at the interface of quantum technology and business development.

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