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Quantum Finance: Exploring the Implications of Quantum Computing on Financial Models

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  • Jiawei Zhou

    (Ulink College Guangzhou)

Abstract

Quantum computing is revolutionizing computational methods in finance by enhancing efficiency and accuracy in financial modeling and risk management. This review explores the impact of quantum computing in finance, focusing on derivative pricing, risk management, and portfolio optimization. It analyzes the benefits, limitations, and future implications of integrating quantum technologies with classical financial systems. A comprehensive review of quantum Monte Carlo methods, quantum algorithms, and their financial applications was conducted. Theoretical foundations, including Chebyshev’s inequality and Grover’s search method, were evaluated for their role in enhancing sampling efficiency and predictive accuracy. Empirical studies and use cases demonstrate the practical implications of quantum computing in pricing financial derivatives and managing risk through Value at Risk and Conditional Value at Risk assessments. The critical findings reveal that Quantum Monte Carlo algorithms provide substantial efficiency gains, reducing sample size requirements by up to fourfold compared to classical methods. Techniques employed in prior studies highlight the effectiveness of Quantum Amplitude Estimation for derivative pricing and risk analysis. However, challenges persist in scalability, data quality, integration with classical systems, and compliance with regulatory standards. This research contributes to the current body of knowledge by providing a comprehensive analysis of quantum algorithms’ practical applications in derivative pricing, risk management, and portfolio optimization, demonstrating the efficiency gains and limitations of quantum approaches. Future research should explore hybrid quantum–classical frameworks, quantum applications in blockchain, and enhanced quantum cryptography to ensure secure and efficient financial transactions.

Suggested Citation

  • Jiawei Zhou, 2026. "Quantum Finance: Exploring the Implications of Quantum Computing on Financial Models," Computational Economics, Springer;Society for Computational Economics, vol. 67(2), pages 1043-1072, February.
    • Handle: RePEc:kap:compec:v:67:y:2026:i:2:d:10.1007_s10614-025-10894-4
    DOI: 10.1007/s10614-025-10894-4
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