Driving Quantum Use Cases in Finance, JPMorgan Chase Joins Q-NEXT Quantum Research Center

On September 19, JPMorgan Chase, a leading global merchant bank, announced that it is a member of the Q-NEXT Quantum Research Center in the U.S. [1]. Q-NEXT is one of five national quantum information science research centers under the U.S. Department of Energy.

01Join Q-NEXT to advance financial use cases for quantum computing, quantum communications

Q-NEXT is led by the U.S. Department of Energy's (DOE) Argonne National Laboratory. With the addition of JPMorgan Chase, the Q-NEXT collaboration now includes 27 institutional partners: 14 companies, 10 universities and three DOE national laboratories.

JPMorgan Chase will work with Q-NEXT to advance the use of quantum technology in fundamental algorithms and to advance quantum information research. In addition, the company is interested in working with community members to build algorithms specific to financial use cases for future impact and applications.

In 2020, JPMorgan Chase opened the Applied Research Lab to design and conduct research, invent, and inform and develop next-generation solutions for customers and businesses across multiple frontier technologies. Among many research areas, the collaboration focuses on advances in quantum computing and quantum communications: the program includes research in the area of quantum key distribution, a method for two parties to share keys to decode encrypted quantum information.

"JPMorgan Chase's research team is excited to join Q-NEXT to foster new research collaborations, work with quantum experts at top research institutions in industry and academia, and continue to enhance the nation's quantum information science." Marco Pistoia, director and head of quantum research at JPMorgan Chase, said, "As the quantum ecosystem continues to evolve as it expands, it is critical to keep pace with scientific advances; membership in the Q-NEXT class allows for strong engagement and interaction as we collaborate to advance future applications of quantum technology. "

Quantum-based technologies have the potential to revolutionize the way we manage and exchange information. Quantum computers could transform the financial industry by providing more accurate predictions about the financial system; quantum networks will be more resistant to tampering and more capable of ensuring secure financial transactions.

"We are very pleased that JPMorgan Chase, one of the world's most respected financial firms, has successfully become a member of Q-NEXT. Their increasing involvement in quantum research is a testament to the importance of the field for emerging applications such as financial and information security," said David Awschalom, director of Q-NEXT, senior scientist at Argonne National Laboratory, professor of molecular engineering and physics at the University of Chicago, and director of the Chicago Quantum Exchange." JPMorgan Chase is using their technical capabilities and understanding of customer needs to advance quantum science with a user-centric approach. Few companies can make this argument, and I look forward to this fruitful collaboration."

02JPMorgan Chase's Quantum Quest

JPMorgan Chase & Co, an American multinational commercial bank and financial services holding company headquartered in New York City, is currently working to scale up its quantum technology. Realizing the importance of quantum computing for banking use cases, JPMorgan Chase has established a quantum engineering team headed by Marco Pistoia. "The impact of quantum computing on financial services will come sooner than you think," Marco Pistoia's team said, adding that the financial industry will benefit from quantum computing "even in the short term.

Marco Pistoia

Since 2017, JPMorgan Chase has been investigating the potential use of quantum computing in options pricing, where it designed the quantum circuits needed to simulate European options pricing and demonstrated that the accuracy of quantum computing would exceed that of classical Monte Carlo calculations in squared form; JPMorgan Chase has also experimented with Honeywell's ion-trap quantum computer to produce the so-called quantum oracle -which is a black-box operation used as input to another algorithm designed to simplify the calculation of Fibonacci numbers (which have applications in investment and information security); JPMorgan has also been experimenting with Quantinuum's quantum computer: using intermediate circuit measurements and reuse and quantum conditional logic, taking advantage of the computer's very high quantum volume.

In addition to this, JPMorgan Chase is very keen to develop quantum algorithms for artificial intelligence, optimization and cryptography.

Starting in 2020, JPMorgan Chase has partnered with a quantum technology center called Chicago Quantum Exchange and says its research team is actively working in the area of post-quantum cryptography.

In 2020, JPMorgan Chase and IBM worked together on quadratic accelerated quantum algorithms for derivatives pricing, and many other banks are so interested in these algorithms that they are gradually starting to work with quantum computing companies in a practical way.

In 2021, the JPMorgan Chase Applied Research and Engineering Futures Lab proposed a hybrid algorithm, NISQ-HHL, which is the first HHL hybrid algorithm suitable for end-to-end execution of small-scale portfolio optimization problems on NISQ devices. The JP Morgan research team said, "Although the focus of this paper is on portfolio optimization, the techniques it proposes to make HHL more scalable are typically applicable to any problem that can be solved by HHL in the NISQ era."

In 2022, JPMorgan Chase, Toshiba, a pioneer in quantum key distribution (QKD), and Ciena, a U.S. telecommunications systems provider, collaborated to demonstrate the full feasibility of a metro QKD network capable of withstanding quantum computing attacks and capable of supporting 800 Gbps data rates for mission-critical applications under real-world environmental conditions; this is the first industry demonstration of how QKD can protect mission-critical mission-critical blockchain applications.

Commenting on JPMorgan's investment in the quantum space, Dr. Marco Pistoia, Distinguished Engineer and head of the FLARE research team, said, "Security is critical to JPMorgan, and this work comes at an important time as we continue to prepare for the launch of practical quantum computers, which will change the blockchain and cryptocurrency for the foreseeable future security landscape for technologies such as cryptocurrency. We are proud to be at the forefront of developing QKD technology for real-world applications while collaborating with industry leaders in the field."

Reference links:

[1]https://www.anl.gov/article/jpmorgan-chase-is-newest-partner-in-qnext-quantum-research-collaboration

[2]https://mp.weixin.qq.com/s/ubaWknX7rxnRft1Nhvgf5Q