One of the largest Japanese banks is betting on quantum computing for finance: Tokenist

Neither the author, Tim Fries, nor this website, The Tokenist, provides financial advice. Please consult our website policy before making any financial decisions.

MUFG Bank, one of the three megabanks in Japan, has reportedly invested billions of yen to buy an 18% stake in Groovenauts, a quantum computing startup. The investment makes MUFG the first of Japan’s three largest banks to bet on quantum technology and attempt to exploit it for financial services.

MUGT will use Quantum Computing to mitigate risk

MUFG Bank, the largest bank in Japan and one of the largest in the world, has invested in Groovenauts, a local startup developing advanced quantum technology solutions. Through the investment, MUFG seeks to use Groovenauts’ quantum technology offerings to enhance its financial services.

Specifically, MUFG will use the technology for complex transactions associated with derivatives trading and risk management and increase its operational efficiency. Groovenauts provides computer services through a technique known as quantum annealing, which aims to identify the optimal answer from many combinations.

MUFG acquired an 18% stake in Groovenauts for several billion yen, making the startup the bank’s equity method affiliate. The move marks the first direct investment in a quantum computing company among Japan’s three megabanks.

The banking giant plans to use Groovenauts’ quantum solutions to reduce the risks associated with financial derivative transactions, claiming the technology could reduce the time it takes to complete specific tasks from an hour to seconds. Additionally, MUFG is exploring the use of quantum technology with interactive artificial intelligence (AI).

Why is quantum technology arousing interest?

MUFG Banks’ investment in Groovenauts underscores growing interest in quantum technology, which has the potential to disrupt numerous industries, including finance. The Tokyo, Japan-based bank seeks to gain a competitive edge in the banking sector through this gamble.

Quantum computing is a burgeoning technology that uses the laws of quantum mechanics to tackle problems that are too complex for classical computers. The rapidly growing adoption of quantum computing comes as companies face significant economic hurdles, forcing them to seek solutions that can reduce costs, generate revenue, and increase operational effectiveness.

In addition to quantum computing, financial players are also increasingly adopting AI technology. Earlier this year, AI startup FlowX.AI raised $35 million in a funding round to continue developing its platform to improve banks’ digital infrastructure. Meanwhile, as many as 53% of consumers are using generative AI solutions to help them with their financial planning and investment efforts.

Finance is changing.

Find out how, with Five Minute Finance.

A weekly newsletter covering the big trends in FinTech and decentralized finance.

Do you think quantum computing can gain mainstream adoption in finance? Let us know in the comments below.

About the author

Tim Fries is the co-founder of The Tokenist. He has a B. Sc. in mechanical engineering from the University of Michigan and an MBA from the University of Chicago Booth School of Business. Tim was a Senior Associate in the investment team at RW Baird’s US Private Equity division and is also a co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.

#largest #Japanese #banks #betting #quantum #computing #finance #Tokenist
Image Source :

Leave a Comment