Xanadu’s ‘Quantum Montecarlo Algorithm’ Project With BMO & Scotiabank Indicates Huge Impact Quantum Will Have on Finance

(BetaKit) Xanadu has announced the findings of a joint proof-of-concept with BMO and Scotiabank. The firms worked on discovering computational speedups and improved accuracy for financial trading products. They used a quantum algorithm developed by Xanadu, known as quantum Monte Carlo. Xanadu said that institutions currently use Monte Carlo’s estimation to model and price derivatives, which often run in huge data centres of parallel CPUs and GPUs. BMO, Scotiabank, and Xanadu said that the project predicted speedups hundreds to thousands of times faster.
“Quantum Monte Carlo is perhaps the strongest evidence yet of the huge impact quantum will have on finance,” said Tom Bromley, researcher and project lead at Xanadu. “This project allowed us to forecast the disruptive potential for derivatives pricing over the coming years, paving the way for near real-time pricing and significantly lower power overhead.”
NOTE: A Monte Carlo algorithm is a type of resource-restricted algorithm that returns answers based on probability. With advances in algorithms and the changing landscape of high performance computers (HPC), the quantum Monte Carlo method has become a leading contender for high accuracy calculations for the electronic structure of realistic systems. QMC, being statistical, is naturally scalable to a large number of processors.