INTHEBLACK September 2021 - Magazine - Page 17
Risk analysis and fraud
detection are also areas
in which quantum
computing is likely
to have an effect.
process this amount of information, which is why
quantum computing represents a true “quantum
leap” in terms of capability.
The biggest challenge for researchers is working
out how to record qubits when they are in
superposition. Qubits are produced with subatomic
particles that change their value when you try to
measure them and change back to a 1 or 0.
Fortunately, these quantum bits interact with
each other through a process called entanglement.
A quantum computer uses entanglement to
measure the correlations between qubits to
perform a calculation.
Quantum computers will become viable for
business use once they can reliably and effectively
manage superposition and entanglement.
IMPACT ON FINANCE AND ACCOUNTING
Quantum computing is particularly interesting
in finance and accounting applications where
optimisation plays a role, Mabbott says.
This includes stock forecasting, asset and bond
returns, and variance and covariance, as well as
aspects of supply chain management, such as
optimising moving goods between warehouses.
A key application is Monte Carlo simulations,
which are used to predict the probability of
different outcomes using random variables.
These simulations explain the impact of risk and
uncertainty in prediction and forecasting models.
Another area ripe for quantum computing is risk
analysis and fraud detection. “Audits are moving
away from random sampling to almost being able
to look at data in real time. We could do real-time
fraud detection and analysis through these
applications,” Mabbott says.
Quantum computing should also boost the
importance of strategy and planning within
finance teams.
“You could run capital scenarios – customer and
business performance, acquisitions – there are all
sorts of things you could play with. That might lead
to a change in the type of people that you recruit
into the function as well,” Mabbott says.
Quantum’s biggest threat to finance and accounting
is most likely its ability to break encryption, says Peter
Turner, CEO of the Sydney Quantum Academy, a joint
venture between four major universities and the New
South Wales Government.
“IF SOMEONE BUILT
THE ‘HOLY GRAIL’
– A FAULTTOLERANT,
SCALABLE
QUANTUM
COMPUTER – THEY
COULD BREAK RSA
STRAIGHT AWAY.”
PETER TURNER, SYDNEY
QUANTUM ACADEMY
CLICK HERE
TO ACCESS
CPA Australia’s
Business
Technology
Report 2021
“If someone built the ‘Holy Grail’ – a faulttolerant, scalable quantum computer – they could
break RSA straight away,” Turner says, referring to
the cryptographic algorithm used to defend
international banking and finance systems.
In 1994, mathematician Peter Shor invented an
algorithm that can crack the very large prime
numbers used in RSA encryption. In 2002, IBM used
a seven-qubit computer to demonstrate that Shor’s
algorithm could factor numbers as predicted.
“Everyone knows how Shor’s algorithm works and
how to implement it if you had the machine to do
it,” Turner says. The Sydney Quantum Academy is
planning to host a public conversation on the ethics
of quantum technology to address these issues.
“If one nation state or organisation built this in a
basement and didn’t tell everyone, it would not be
good for anyone,” Turner says. “We support the
development of a shared understanding of
responsible use of quantum technologies.”
HOW TO PREPARE FOR A QUANTUM FUTURE
KPMG sees three practical quantum engagement
strategies for finance and accounting firms.
“If you’re interested in high-risk investment
in new technology, it’s imperative to engage,”
Mabbott says.
“There is a bunch of people doing things in
hardware, applications and middleware. A number
of those could go on to be the next Intel or Google.”
The second strategy is to partner with researchers
solving complex problems in your field. Universitybased quantum physicists often have limited
experience of business and need case studies
to support practical applications for their work.
The third strategy is to stay up to date with
developments in data security – for example the
work currently under way in creating a quantumproof encryption standard, as well as new forms
of encryption based on quantum cryptography.
When will we see the first practical quantum
computer? The distance to that horizon, says Turner,
depends on how many resources are committed to
achieving it.
With the world’s economic powerhouses, China
and the US, both tipping billions of dollars into “the
world’s most important technology race”, perhaps
the age of quantum computing will arrive sooner
rather than later.
intheblack.com September 2021 17