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Quantum Technology in the Financial Sector: Econometric Analyses and Risk Management to Mitigate the Quantum Winter

Year 2024, , 477 - 489, 22.04.2024
https://doi.org/10.33206/mjss.1346041

Abstract

In today's rapidly evolving financial landscape, methods as econometric modeling, predictive analysis, and risk analysis are becoming increasingly important. These methods offer critical tools for understanding and managing the potential of quantum technology in the financial sector. Quantum technology can achieve fast and precise results in data analysis, risk management, portfolio optimization, and market forecasting. However, to realize these possibilities, we need to overcome technical challenges as well as financial and strategic barriers. This paper discusses scientific awareness and proposed solutions to 'Quantum Winter' especially in the financial sector. Mitigating the risk of a 'Quantum Winter' is possible through steps such as building strategic partnerships, conducting risk analysis, developing specialized capabilities, securing government support, and establishing appropriate regulations. Econometric modeling, predictive analysis, and risk analysis are indispensable tools to understand the potential of quantum technology in the financial sector and to achieve sustainable success.

Ethical Statement

During the writing process of the study “Quantum Technology in the Financial Sector: Econometric Analyses and Risk Management to Mitigate the Quantum Winter” scientific rules, ethical and citation rules were followed. No falsification was made on the collected data and this study was not sent to any other academic publication medium for evaluation.

References

  • Biele R. D’Agosta R., (2012), “A stochastic approach to open quantum systems”, J Phys Condens Matter, July 11, 24(27):273201, doi: 10.1088/0953-8984/24/27/273201. Epub 2012 Jun 20.
  • Bouland, Adam, Wim van Dam, Hamed Joorati, Iordanis Kerenidis, Anupam Prakash (2020), “Prospects and Challenges of Quantum Finance”, https://arxiv.org/pdf/2011.06492.pdf
  • Cirac, J. I., (2021), “Quantum Computing and simulation”, Nanophotonics, 10(1):453-456, De Gruyter.
  • Deodoro, J., Gorbanyov, M., Malaika, M., & Sedik, T. (2021), “Quantum Computing and The Financial System: Spooky Action at a Distance?” Imf Working Paper.
  • Dervovic D., Herbster M., Mountney P., Severini S., Usher N and Wossnig L., (2018), “Quantum linear systems algorithms: a primer, https://doi.org/10.48550/arXiv.1802.08227, arXiv:1802.08227 (quant-ph)
  • Egger D. J.. et al. (2020), “Quantum Computing for Finance: State of the Art and Future Prospects”, IEEE Transactions on Quantum Engineering, Vol 1., pp. 1-24, Art No. 3101724, doi: 10.1109/TQE: 2020.3030314.
  • Herman D., Googin C., Liu X., Galda A., Safro I. Sun Y., Pistoia M. and Alexeev Y., (2022), “A Survey of Quantum Computing for Finance”, arXiv: 2201.02773, https://doi.org/10.48550/arXiv.2201.02773, Quantum Physics (quant-ph); Computational Finance (q-fin.CP).
  • Jenet, A., Trefzger C., Lewis A.M., Taucer F., Berghe, L. V. D., Tüchler A., Loeffler M. and Nik S. (2020), “Making Quantum Technology Ready for Industry, Putting Science into Standarts”, #Standarts4Quantum, JRC Conference and Workshop Report, JRC118197 EUR 30196 EN, ISBN 978-92-76-18452-2, ISSN 1831-9424, doi:10.2760/882029 .
  • Lee Raymond S. T., (2020), “Quantum Finance, Intelligent Forecast and Trading Systems”, Springer, ISBN 978- 981-32-9795-1, ISBN 978-981-32-9796-8 (eBook), https://doi.org/10.1007/978-981-32-9796-8
  • Li H., Xing T., Wei S., Liu Z., Zhang J., Long. Gui-Lu (2023), “BQ-Bank: A Quantum Software for Finance and Banking”, Hindawi, Quantum Engineering, Volume 2023, Article ID 7810974, https://doi.org/10.1155/2023/7810974
  • Light G. L. (2023), “An Introductory Note to Quantum Modelingin Finance”, European Journal of Applied Physics 5(5):16-20, DOI: 10.24018/ejphysics.2023.5.5.280
  • M´enard, A., Ostojic, I., Patel, M., & Volz, D. (2020). “A game plan for quantum computing.”, McKinsey&Company.https://www.mckinsey.com/capabilities/mckinsey- digital/our- insights/agame-plan- for-quantum-computing
  • Madsen, L. S., Laudenbach F., Askarani M. F., Rortais F., Vincent T., Bulmer J. F. F., Miatto F. M., Neuhaus L., Helt L. G., Collins M. J., Lita, A. E., Gerrits T., Nam S. W., Vaidya V. D., Menotti M., Dhand I., Vernon Z., Quesada N. and Lavoie J. (2022), “Quantum computational advantage with a programmable photonic processor”, Nature,Jun;606(7912):75-81. doi: 10.1038/s41586-022-04725-x. Epub 2022 Jun 1.
  • Mugel S., Lizaso E., Orus E., (2020), “Use Cases of Quantum Optimization for Finance”, arXiv:2010.01312 [q- fin.GN], (or arXiv:2010.01312v1 [q-fin.GN] for this version), https://doi.org/10.48550/arXiv.2010.01312
  • Naik A., Yeniaras E., Hellstern G., Prasad G., Kumar S. and Vishwakarma L. P., (2023), “From Portfolio Optimization to Quantum Blockchain and Security: A Systematic Review of Quantum Computing in Finance”, QuantFin, Computational Finance, Pub Date: 2023-06-12, DOI:arxiv-2307.01155.
  • Parker, E., (2021), “Commercial and Military Applications and Timelines for Quantum Technology”, Rand Corporation, Research Report, ISBN: 978-1-9774-0752-8.
  • Pistoia, M., Ahmad S. F., Ajagekar A., Buts A., Chakrabarti S., Herman D., Hu S., Jena A., Minssen P., Niroula P., Rattew A., Sun Y., Yalovetzky R. (2021), “”, Quantum Physics (quant-ph); Machine Learning (cs.LG), arXiv:2109.04298 [quant-ph], (or arXiv:2109.04298v1 [quant-ph] for this version),
  • Rapp P. Hermann, (2021), “Economic – technological revolution through Quantum 2.0, New super technologies are within reach”, Germany Monitor, Deutsche Bank Research, (Editor: DB Research Management Schneider S.), December 17, 2021.
  • Saltan A. and Hyrynsalmi S., (2023), “The Business Perspective of Quantum Computing: An Overview”, CEUR Workshop Proceedings, 2023, Volume number: 3316, eISSN: 1613-0073
  • Seskir, Z. C.,(2019), “Current State of Quantum Information Technologies in Turkey”, Msc Thesis, June 2019, Department of Science and Technology Policy Studies, The Graduate School of Social Sciences of METU.

Finansal Sektörde Kuantum Teknolojisi: Ekonometrik Analizler ve Kuantum Kışını Hafifletmek için Risk Yönetimi

Year 2024, , 477 - 489, 22.04.2024
https://doi.org/10.33206/mjss.1346041

Abstract

Günümüz hızla evrilen finansal manzarada, ekonometrik modelleme, tahminsel analizler ve risk analizi gibi yöntemler giderek daha fazla önem kazanmaktadır. Bu yöntemler, kuantum teknolojisinin finans sektöründeki potansiyelini anlamak ve yönetmek için kritik araçlar sunar. Kuantum teknolojisi, büyük veri analizi, risk yönetimi, portföy optimizasyonu ve piyasa tahmini gibi alanlarda hızlı ve kesin sonuçlar elde etme yeteneğine sahiptir. Ancak, bu olanakları gerçekleştirmek için yalnızca teknik zorlukların değil, aynı zamanda finansal ve stratejik engellerin üstesinden gelmemiz gerekmektedir. Bu çalışma, özellikle finans sektöründe 'Kuantum Kışı'na dair bilimsel farkındalığı ve önerilen çözümleri tartışmaktadır. 'Kuantum Kışı' riskini azaltmak, stratejik ortaklıklar kurmak, risk analizi yapmak, uzman yetenekleri geliştirmek, hükümet desteği sağlamak ve uygun düzenlemeleri oluşturmak gibi adımlarla mümkündür. Ekonometrik modelleme, tahminsel analizler ve risk analizi, kuantum teknolojisinin finans sektöründeki potansiyelini anlamak ve sürdürülebilir başarı elde etmek için vazgeçilmez araçlardır.

Ethical Statement

During the writing process of the study “Quantum Technology in the Financial Sector: Econometric Analyses and Risk Management to Mitigate the Quantum Winter” scientific rules, ethical and citation rules were followed. No falsification was made on the collected data and this study was not sent to any other academic publication medium for evaluation.

References

  • Biele R. D’Agosta R., (2012), “A stochastic approach to open quantum systems”, J Phys Condens Matter, July 11, 24(27):273201, doi: 10.1088/0953-8984/24/27/273201. Epub 2012 Jun 20.
  • Bouland, Adam, Wim van Dam, Hamed Joorati, Iordanis Kerenidis, Anupam Prakash (2020), “Prospects and Challenges of Quantum Finance”, https://arxiv.org/pdf/2011.06492.pdf
  • Cirac, J. I., (2021), “Quantum Computing and simulation”, Nanophotonics, 10(1):453-456, De Gruyter.
  • Deodoro, J., Gorbanyov, M., Malaika, M., & Sedik, T. (2021), “Quantum Computing and The Financial System: Spooky Action at a Distance?” Imf Working Paper.
  • Dervovic D., Herbster M., Mountney P., Severini S., Usher N and Wossnig L., (2018), “Quantum linear systems algorithms: a primer, https://doi.org/10.48550/arXiv.1802.08227, arXiv:1802.08227 (quant-ph)
  • Egger D. J.. et al. (2020), “Quantum Computing for Finance: State of the Art and Future Prospects”, IEEE Transactions on Quantum Engineering, Vol 1., pp. 1-24, Art No. 3101724, doi: 10.1109/TQE: 2020.3030314.
  • Herman D., Googin C., Liu X., Galda A., Safro I. Sun Y., Pistoia M. and Alexeev Y., (2022), “A Survey of Quantum Computing for Finance”, arXiv: 2201.02773, https://doi.org/10.48550/arXiv.2201.02773, Quantum Physics (quant-ph); Computational Finance (q-fin.CP).
  • Jenet, A., Trefzger C., Lewis A.M., Taucer F., Berghe, L. V. D., Tüchler A., Loeffler M. and Nik S. (2020), “Making Quantum Technology Ready for Industry, Putting Science into Standarts”, #Standarts4Quantum, JRC Conference and Workshop Report, JRC118197 EUR 30196 EN, ISBN 978-92-76-18452-2, ISSN 1831-9424, doi:10.2760/882029 .
  • Lee Raymond S. T., (2020), “Quantum Finance, Intelligent Forecast and Trading Systems”, Springer, ISBN 978- 981-32-9795-1, ISBN 978-981-32-9796-8 (eBook), https://doi.org/10.1007/978-981-32-9796-8
  • Li H., Xing T., Wei S., Liu Z., Zhang J., Long. Gui-Lu (2023), “BQ-Bank: A Quantum Software for Finance and Banking”, Hindawi, Quantum Engineering, Volume 2023, Article ID 7810974, https://doi.org/10.1155/2023/7810974
  • Light G. L. (2023), “An Introductory Note to Quantum Modelingin Finance”, European Journal of Applied Physics 5(5):16-20, DOI: 10.24018/ejphysics.2023.5.5.280
  • M´enard, A., Ostojic, I., Patel, M., & Volz, D. (2020). “A game plan for quantum computing.”, McKinsey&Company.https://www.mckinsey.com/capabilities/mckinsey- digital/our- insights/agame-plan- for-quantum-computing
  • Madsen, L. S., Laudenbach F., Askarani M. F., Rortais F., Vincent T., Bulmer J. F. F., Miatto F. M., Neuhaus L., Helt L. G., Collins M. J., Lita, A. E., Gerrits T., Nam S. W., Vaidya V. D., Menotti M., Dhand I., Vernon Z., Quesada N. and Lavoie J. (2022), “Quantum computational advantage with a programmable photonic processor”, Nature,Jun;606(7912):75-81. doi: 10.1038/s41586-022-04725-x. Epub 2022 Jun 1.
  • Mugel S., Lizaso E., Orus E., (2020), “Use Cases of Quantum Optimization for Finance”, arXiv:2010.01312 [q- fin.GN], (or arXiv:2010.01312v1 [q-fin.GN] for this version), https://doi.org/10.48550/arXiv.2010.01312
  • Naik A., Yeniaras E., Hellstern G., Prasad G., Kumar S. and Vishwakarma L. P., (2023), “From Portfolio Optimization to Quantum Blockchain and Security: A Systematic Review of Quantum Computing in Finance”, QuantFin, Computational Finance, Pub Date: 2023-06-12, DOI:arxiv-2307.01155.
  • Parker, E., (2021), “Commercial and Military Applications and Timelines for Quantum Technology”, Rand Corporation, Research Report, ISBN: 978-1-9774-0752-8.
  • Pistoia, M., Ahmad S. F., Ajagekar A., Buts A., Chakrabarti S., Herman D., Hu S., Jena A., Minssen P., Niroula P., Rattew A., Sun Y., Yalovetzky R. (2021), “”, Quantum Physics (quant-ph); Machine Learning (cs.LG), arXiv:2109.04298 [quant-ph], (or arXiv:2109.04298v1 [quant-ph] for this version),
  • Rapp P. Hermann, (2021), “Economic – technological revolution through Quantum 2.0, New super technologies are within reach”, Germany Monitor, Deutsche Bank Research, (Editor: DB Research Management Schneider S.), December 17, 2021.
  • Saltan A. and Hyrynsalmi S., (2023), “The Business Perspective of Quantum Computing: An Overview”, CEUR Workshop Proceedings, 2023, Volume number: 3316, eISSN: 1613-0073
  • Seskir, Z. C.,(2019), “Current State of Quantum Information Technologies in Turkey”, Msc Thesis, June 2019, Department of Science and Technology Policy Studies, The Graduate School of Social Sciences of METU.
There are 20 citations in total.

Details

Primary Language English
Subjects Time-Series Analysis, Econometrics (Other)
Journal Section Research Article
Authors

Emrah Hanifi Fırat 0000-0003-3800-6574

Publication Date April 22, 2024
Submission Date August 19, 2023
Published in Issue Year 2024

Cite

APA Fırat, E. H. (2024). Quantum Technology in the Financial Sector: Econometric Analyses and Risk Management to Mitigate the Quantum Winter. MANAS Sosyal Araştırmalar Dergisi, 13(2), 477-489. https://doi.org/10.33206/mjss.1346041
AMA Fırat EH. Quantum Technology in the Financial Sector: Econometric Analyses and Risk Management to Mitigate the Quantum Winter. MJSS. April 2024;13(2):477-489. doi:10.33206/mjss.1346041
Chicago Fırat, Emrah Hanifi. “Quantum Technology in the Financial Sector: Econometric Analyses and Risk Management to Mitigate the Quantum Winter”. MANAS Sosyal Araştırmalar Dergisi 13, no. 2 (April 2024): 477-89. https://doi.org/10.33206/mjss.1346041.
EndNote Fırat EH (April 1, 2024) Quantum Technology in the Financial Sector: Econometric Analyses and Risk Management to Mitigate the Quantum Winter. MANAS Sosyal Araştırmalar Dergisi 13 2 477–489.
IEEE E. H. Fırat, “Quantum Technology in the Financial Sector: Econometric Analyses and Risk Management to Mitigate the Quantum Winter”, MJSS, vol. 13, no. 2, pp. 477–489, 2024, doi: 10.33206/mjss.1346041.
ISNAD Fırat, Emrah Hanifi. “Quantum Technology in the Financial Sector: Econometric Analyses and Risk Management to Mitigate the Quantum Winter”. MANAS Sosyal Araştırmalar Dergisi 13/2 (April 2024), 477-489. https://doi.org/10.33206/mjss.1346041.
JAMA Fırat EH. Quantum Technology in the Financial Sector: Econometric Analyses and Risk Management to Mitigate the Quantum Winter. MJSS. 2024;13:477–489.
MLA Fırat, Emrah Hanifi. “Quantum Technology in the Financial Sector: Econometric Analyses and Risk Management to Mitigate the Quantum Winter”. MANAS Sosyal Araştırmalar Dergisi, vol. 13, no. 2, 2024, pp. 477-89, doi:10.33206/mjss.1346041.
Vancouver Fırat EH. Quantum Technology in the Financial Sector: Econometric Analyses and Risk Management to Mitigate the Quantum Winter. MJSS. 2024;13(2):477-89.

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