Fujitsu’s Quantum-inspired Algorithm Improves Investment Portfolios’ Asset Allocation

black and gray laptop computer turned on
black and gray laptop computer turned on

Fujitsu’s Quantum-inspired Algorithm Improves Investment Portfolios’ Asset Allocation

Insider Brief

  • Fujitsu reports its quantum-inspired solution achieved excellent results in a Kutxabank project is to improve the allocation of assets to its investment portfolios.
  • The algorithm made it possible to calculate the optimal distribution of investments to be made, through a series of extremely complex permutation operations.
  • The second phase of the project, whose completion is scheduled for December 2023, aims to optimize the processes already in place and incorporate new functionalities.

PRESS RELEASE — Fujitsu’s quantum-inspired solution, Digital Annealer, has achieved excellent results in the ambitious project that the financial institution Kutxabank is developing to improve the allocation of assets to its investment portfolios.

A project in collaboration with the company Quantum Mads and the open innovation platform INNOLAB Bilbao. The first phase, carried out from February 2021 to July 2022 as a proof of concept, has concluded with excellent results and directly enables the start of the second phase that will lead to the industrialization of the algorithm.

During the proof of concept, the performance of the solution that has been developed using Fujitsu’s Digital Annealer has been compared to the entity’s current classic solution, taking into account both the return and the associated risk or volatility, with significant improvements being observed in both cases. Fujitsu’s Digital Annealer has made it possible to calculate the optimal distribution of investments to be made, through a series of extremely complex permutation operations. For its part, Quantum Mads developed an algorithm that reduced the number of variables needed to formulate the problem.

The second phase of the project, whose completion is scheduled for December 2023, aims to optimize the processes already in place, and incorporates new functionalities by interacting quantitatively with the model in a real and current environment. The goal for Kutxabank is to create a prototype capable of detecting needs and opportunities that are covered, with a technological solution in a real environment, and that concludes with the start-up of the solution based on the prototype.

A model at the forefront of the system

The model created applies quantum computing to the most computationally expensive tasks, at the forefront of the system, to organize investment strategies through asset allocation. It consists of choosing and distributing financial assets in an investment portfolio, one of the most important decisions faced by management companies. It has been accurately demonstrated that it is capable of processing large volumes of historical data, from the last 3 years, and improving its dynamic adaptation to financial markets.

Fujitsu Digital Annealer

Fujitsu’s Digital Annealer is the quantum-inspired digital technology architecture that harnesses innovations in high-density circuit integration and high-performance processing. This innovative architecture is inspired by the key features of quantum computing (superposition and quantum tunneling), allowing the Digital Annealer to evaluate a large number of potential options simultaneously and deliver lightning-fast responses.

The current generation Digital Annealer has the ability to solve problems with up to 100,000 variables, which substantially expands the scale of problems that can be solved at the same time, optimizing their accuracy and performance.

This solution has proven to be the best in its class for quickly finding an optimal solution when there are an extremely large number of possible combinations.

Matt Swayne

Matt Swayne

Matt Swayne is a contributor at The Quantum Insider. He focuses on breaking news about quantum discoveries and quantum computing.

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