Transform risk management with Wipro’s quantum-powered simulations for faster, smarter decisions.
Financial institutions must comply with stringent regulatory norms while optimizing capital allocation. Risk models like Value-at-Risk (VaR) and Expected Shortfall require Monte Carlo simulations across millions of scenarios. Classical systems often take hours or days to compute these, limiting agility in volatile markets.
Why Quantum Computing:
Quantum algorithms such as Quantum Amplitude Estimation (QAE) significantly accelerate Monte Carlo simulations by reducing its complexity and obtaining more accurate results in fewer processing cycles. This means risk metrics can be computed in minutes instead of hours.
The Quantum Advantage:
- Speed: Faster scenario analysis enables real-time decision-making.
- Accuracy: Improved precision in tail-risk estimation reduces capital buffers without compromising compliance.
- Impact: Banks can optimize liquidity and respond to market shocks proactively.
Our Solution
We built a hybrid quantum circuit that produced a distribution of capital need and the frequency. Higher the frequency the high possibility of such scenario. A risk analyst can take a call based on the distribution how much capital should be allocated in order to be solvent during the time period. The computation typically done every quarter or on need basis.
