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BBVA trials quantum computing to optimise investment portfolio management

BBVA trials quantum computing to optimise investment portfolio management

BBVA and Spanish startup Multiverse have run a proof-of-concept using quantum technologies to improve the process of dynamically optimising investment portfolios with market data.

BBVA began its quantum journey almost two years ago and now has a team specialised in quantum development, business units involved in the initiative, strategic alliances agreed, and various lines of research in place.

The bank is working with different technology partners on a host of projects - including credit scoring, currency arbitrage and derivatives valuations - involving the technology.

In a scientific paper, it has now laid out the findings of its work with Multiverse to take on a classic problem in finance: defining the optimal path when configuring portfolios dynamically.

In the PoC researchers attempted to solve the problem with a combination of quantum technology platform, inspired by quantum computing and traditional techniques.

They concluded that quantum computing-based tools and quantum-inspired algorithms could already perform the task more efficiently than traditional methods.

The idea was to determine the optimal trading path for an investment portfolio consisting of 52 assets, using actual market price data corresponding with an eight year timeframe. Processing this amount of data would have taken a normal computer using conventional algorithms about two days but using quantum algos cut this to seconds.

Escolastico Sanchez, head, research and patents, BBVA, says: "Methods based on quantum computing an quantum-inspired methods are new and can improve the current tools that re already in practice."

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