IDEAS home Printed from https://ideas.repec.org/p/arx/papers/2604.08180.html

Quantum Computing for Financial Transformation: A Review of Optimisation, Pricing, Risk, Machine Learning, and Post-Quantum Security

Author

Listed:
  • Hui Gong
  • Akash Sedai
  • Thomas Schroeder
  • Francesca Medda

Abstract

Quantum computing is becoming strategically relevant to finance because several core financial bottlenecks are already defined by combinatorial search, expectation estimation, rare-event analysis, representation learning, and long-horizon cryptographic resilience. This review examines that landscape across five connected domains: constrained portfolio optimisation, derivative pricing, tail-risk and scenario estimation, quantum machine learning, and post-quantum security. Rather than treating these topics as isolated demonstrations, the article studies them as linked layers of a financial-computation stack. Across all five domains, the review applies a common evaluative logic: identify the financial bottleneck, specify the relevant quantum primitive, compare it with an explicit classical benchmark, and assess the result under realistic implementation and governance constraints. The main conclusion is measured but consequential. The strongest near-term case for quantum finance lies in carefully designed hybrid workflows rather than blanket claims of universal advantage. Quantum optimisation is most credible when constrained search dominates; amplitude-estimation methods matter most when repeated expectation evaluation is the binding cost; quantum machine learning remains task dependent; and post-quantum cryptography is already strategically necessary because financial infrastructures must migrate before fault-tolerant attacks arrive. By combining system-level synthesis with locally reproducible small-scale case studies on simulated qubit registers, the article is intended both as a review of the field and as a handbook-style entry point for future work.

Suggested Citation

  • Hui Gong & Akash Sedai & Thomas Schroeder & Francesca Medda, 2026. "Quantum Computing for Financial Transformation: A Review of Optimisation, Pricing, Risk, Machine Learning, and Post-Quantum Security," Papers 2604.08180, arXiv.org.
  • Handle: RePEc:arx:papers:2604.08180
    as

    Download full text from publisher

    File URL: http://arxiv.org/pdf/2604.08180
    File Function: Latest version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Jacob Biamonte & Peter Wittek & Nicola Pancotti & Patrick Rebentrost & Nathan Wiebe & Seth Lloyd, 2017. "Quantum machine learning," Nature, Nature, vol. 549(7671), pages 195-202, September.
    2. Daniel J. Egger & Claudio Gambella & Jakub Marecek & Scott McFaddin & Martin Mevissen & Rudy Raymond & Andrea Simonetto & Stefan Woerner & Elena Yndurain, 2020. "Quantum Computing for Finance: State of the Art and Future Prospects," Papers 2006.14510, arXiv.org, revised Jan 2021.
    3. Mark Broadie & Özgür Kaya, 2006. "Exact Simulation of Stochastic Volatility and Other Affine Jump Diffusion Processes," Operations Research, INFORMS, vol. 54(2), pages 217-231, April.
    4. Vojtěch Havlíček & Antonio D. Córcoles & Kristan Temme & Aram W. Harrow & Abhinav Kandala & Jerry M. Chow & Jay M. Gambetta, 2019. "Supervised learning with quantum-enhanced feature spaces," Nature, Nature, vol. 567(7747), pages 209-212, March.
    5. Gourieroux, C. & Jasiak, J. & Sufana, R., 2009. "The Wishart Autoregressive process of multivariate stochastic volatility," Journal of Econometrics, Elsevier, vol. 150(2), pages 167-181, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Abraham Itzhak Weinberg, 2025. "Hybrid Quantum-Classical Ensemble Learning for S\&P 500 Directional Prediction," Papers 2512.15738, arXiv.org.
    2. Almut Veraart & Luitgard Veraart, 2012. "Stochastic volatility and stochastic leverage," Annals of Finance, Springer, vol. 8(2), pages 205-233, May.
    3. Vicente Moret-Bonillo & Samuel Magaz-Romero & Eduardo Mosqueira-Rey, 2022. "Quantum Computing for Dealing with Inaccurate Knowledge Related to the Certainty Factors Model," Mathematics, MDPI, vol. 10(2), pages 1-21, January.
    4. Taofeek Adeshina Yusuff & Kenechukwu Francis Iloeje & Sylviastella Favour Peteranaba & Victoria Sharon Akinlolu & Nimotalai Olusola Kassim & Zuraifa Hamidu, 2025. "Creating Quantum-Powered Epidemiological Models Enabling Proactive Responses to Pandemics and Emerging Health Threats," International Journal of Scientific Research and Modern Technology, Prasu Publications, vol. 4(10), pages 39-58.
    5. Kang, Chulmin & Kang, Wanmo, 2013. "Transform formulae for linear functionals of affine processes and their bridges on positive semidefinite matrices," Stochastic Processes and their Applications, Elsevier, vol. 123(6), pages 2419-2445.
    6. Olawale Ayoade & Pablo Rivas & Javier Orduz, 2022. "Artificial Intelligence Computing at the Quantum Level," Data, MDPI, vol. 7(3), pages 1-16, February.
    7. Wei-Ming Li & Shi-Ju Ran, 2022. "Non-Parametric Semi-Supervised Learning in Many-Body Hilbert Space with Rescaled Logarithmic Fidelity," Mathematics, MDPI, vol. 10(6), pages 1-15, March.
    8. Syed Muhammad Abuzar Rizvi & Usama Inam Paracha & Uman Khalid & Kyesan Lee & Hyundong Shin, 2025. "Quantum Machine Learning: Towards Hybrid Quantum-Classical Vision Models," Mathematics, MDPI, vol. 13(16), pages 1-14, August.
    9. Ajagekar, Akshay & You, Fengqi, 2022. "Quantum computing and quantum artificial intelligence for renewable and sustainable energy: A emerging prospect towards climate neutrality," Renewable and Sustainable Energy Reviews, Elsevier, vol. 165(C).
    10. Daniel J. Egger & Claudio Gambella & Jakub Marecek & Scott McFaddin & Martin Mevissen & Rudy Raymond & Andrea Simonetto & Stefan Woerner & Elena Yndurain, 2020. "Quantum Computing for Finance: State of the Art and Future Prospects," Papers 2006.14510, arXiv.org, revised Jan 2021.
    11. Huang, Chenyi & Zhang, Shibin & Chang, Yan & Yan, Lily, 2024. "Quantum metric learning with fuzzy-informed learning," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 643(C).
    12. Anna Cieslak & Pavol Povala, 2016. "Information in the Term Structure of Yield Curve Volatility," Journal of Finance, American Finance Association, vol. 71(3), pages 1393-1436, June.
    13. Asai, Manabu & McAleer, Michael, 2015. "Leverage and feedback effects on multifactor Wishart stochastic volatility for option pricing," Journal of Econometrics, Elsevier, vol. 187(2), pages 436-446.
    14. Deepak Ranga & Aryan Rana & Sunil Prajapat & Pankaj Kumar & Kranti Kumar & Athanasios V. Vasilakos, 2024. "Quantum Machine Learning: Exploring the Role of Data Encoding Techniques, Challenges, and Future Directions," Mathematics, MDPI, vol. 12(21), pages 1-32, October.
    15. Alexander Philipov & Mark Glickman, 2006. "Factor Multivariate Stochastic Volatility via Wishart Processes," Econometric Reviews, Taylor & Francis Journals, vol. 25(2-3), pages 311-334.
    16. Song-Ping Zhu & Xin-Jiang He, 2018. "A hybrid computational approach for option pricing," International Journal of Financial Engineering (IJFE), World Scientific Publishing Co. Pte. Ltd., vol. 5(03), pages 1-16, September.
    17. Jaehyuk Choi, 2024. "Exact simulation scheme for the Ornstein-Uhlenbeck driven stochastic volatility model with the Karhunen-Lo\`eve expansions," Papers 2402.09243, arXiv.org, revised May 2026.
    18. Wu, Jiang & Ou, Guiyan & Liu, Xiaohui & Dong, Ke, 2022. "How does academic education background affect top researchers’ performance? Evidence from the field of artificial intelligence," Journal of Informetrics, Elsevier, vol. 16(2).
    19. Chan Joshua & Doucet Arnaud & León-González Roberto & Strachan Rodney W., 2025. "Multivariate Stochastic Volatility with Co-Heteroscedasticity," Studies in Nonlinear Dynamics & Econometrics, De Gruyter, vol. 29(3), pages 265-300.
    20. Jin Sun & Eckhard Platen, 2019. "Benchmarked Risk Minimizing Hedging Strategies for Life Insurance Policies," Research Paper Series 399, Quantitative Finance Research Centre, University of Technology, Sydney.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arx:papers:2604.08180. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: arXiv administrators (email available below). General contact details of provider: http://arxiv.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.