Bankia AM has taken its first steps in quantum computing applied to the management of investment funds portfolios using technology from Multiverse Computing, according to news release, translated from the original version.
The startup, together with Bankia’s innovation and asset management teams, have developed a quantum algorithm capable of calculating the optimal investment trajectories for a set of funds, determining the best purchase options , sale and transfer over a year for different risk profiles.
“This proof of concept (PoC) represents a first step for the bank in the application of quantum computing. Thanks to it, we have begun to learn how to pose problems under a completely new paradigm and different from the one we already know in classical computing and how to interpret the results,” said Mario Abad, director of Bankia AM’s shareholder service.
The firm has managed to identify optimal paths using past data, which “sheds light on which would have been the best decisions at all times” and until now they were not able to determine, said Abad.
To do this, the values of 50 funds have been taken during the period and calculated what should have been the optimal composition of an investment portfolio during said period for different risk profiles, including possible penalties and commissions for early repayment.
In the case of this proof of concept, the best composition of the portfolio was found between 1 followed by 1,300 zeros for each risk profile. The calculations in the quantum computer have taken only a few minutes.
This problem is unapproachable with conventional computing, since a normal computer could not find the optimal composition of the portfolio, not even calculating throughout the entire age of the universe.
However, Multiverse and Bankia have been able to find optimal solutions in affordable time through quantum computing, in particular using the quantum processor type ‘quantum annealer’ from the Canadian company D-Wave.
The proof of concept is included within the strategic challenges and lines of action of Bankia’s corporate innovation and cybersecurity department.
Through this proof of concept Bankia, together with Multiverse Computing, has managed to apply quantum computing to investment analysis and opens the way to new applications of this technology in the financial field.
“A next step that would make sense to consider would be how to take advantage of the power of this technology to obtain a certain predictive capacity. If achieved, the results obtained would have numerous applications,”said the director of Bankia AM’s shareholder service.