The Australian financial services sector is in flux as it awaits the fallout from the banking royal commission.
The likely outcome is that organisations in the financial services sector will look for smarter, better ways to do business. This creates an ideal environment for Artificial Intelligence (AI) and quantum computing to reach their full potential.
AI has been steadily maturing over the past few decades and, finally, a computer program simulating a human passed the Turing test. This measures how capable AI is by seeing whether a user could mistake it for a human. This demonstrates that AI is ready for business.
Some of the immediate opportunities for AI lie in areas where there is repetitive, manual work that could be automated. This includes opportunities such as fraud detection where patterns and anomalies can indicate activity that needs to be investigated.
Furthermore, many organisations including financial services and insurance providers have started using self-service chatbots to let users get information or even start the claims process without having to involve a human customer service representative.
Solving highly-complex problems
The power of computers has continued to grow exponentially over the years and people are accustomed to having very powerful processors in their desktops and even in their phones. Now, quantum computing promises to deliver mathematical powers beyond anything seen in the past, solving highly-complex problems that are currently deemed unsolvable.
Quantum computers do this by using more than just the ones and zeros used by computers today. Quantum computing relies on the addition of ‘qubits’ (quantum bits), which are quantum systems with two states. This means they can store much more information than just a one or a zero. Qubits hold different positions simultaneously and aren’t blocked by things in their way.
This is important because encryption, which helps keep information secure, relies on complex mathematics that a quantum computer would be able to solve instantly. For example, ATMs present a challenge for banks.
The bank needs to fill the right machines with the correct amount of currency depending on their location and use. They can’t simply pack each machine with cash because it’s more prudent to keep the total amount of money deposited across all ATMs as low as possible to minimise risk.
The huge number of variables involved make this extremely difficult to calculate correctly. However, a quantum computer could do this quickly and easily.
Similar challenges exist in the arenas of portfolio management, trading, calculating loans, and carrying out credit ratings. The power of quantum computing could do these calculations instantly, saving financial organisations time and making their transactions less risky and more secure.
Importantly, quantum computing can add significant power to AI applications. Combined, they could make it possible to analyse big data at a truly granular level, regardless of how massive the data sets are. Currently, this is nearly impossible because patterns and correlations get lost in the sea of data noise.
Better customer service
But, by adding AI to quantum computing, it could become possible to handle those large data sets and, moreover, extract meaningful and actionable insights quickly and reliably.
This would mean that financial services organisations can provide better, less risky products and services to more customers. They can do this by identifying areas of customer need, analysing patterns to identify and eliminate risk, and developing offerings accordingly.
The financial services industry stands on the cusp of a new era that could be powered by robots. Research and development is continuing at a fast pace and it won’t be long before the first quantum computing-powered AI robots are revolutionising financial services.
Quantum computing is closer than you think with technologies such as Fujitsu’s Digital Annealer, which takes us one step further towards quantum computing using conventional technology.
Peter Lawther is Chief Technology Officer, Fujitsu Australia and New Zealand