June 27, 2025 -- Yonsei University, in collaboration with Orientum and KB Kookmin Bank, has been selected for the Ministry of Science and ICT’s national project titled “Challenge Research for Quantum Advantage Based on Quantum Computing.” The consortium will launch a groundbreaking study aimed at applying quantum computing to the prediction of financial derivatives pricing.

The three-year project, running through 2027 with a total budget of KRW 3.05 billion, is titled “Implementation of Stochastic Differential Equation Solvers for Derivatives Pricing and Demonstration of Quantum Advantage.” The research seeks to overcome the limitations of conventional Black-Scholes-based Monte Carlo simulations by integrating quantum computing techniques into financial modeling.

The team will utilize block encoding methods—advanced quantum computing techniques capable of processing high-dimensional problems—to significantly improve the accuracy of risk and volatility forecasts. This approach aims to demonstrate the potential of quantum computing in solving complex financial tasks that are otherwise intractable with classical systems.

Professor Shiho Kim, the project’s principal investigator, noted, “This research serves as a critical proof-of-concept for the practical benefits of quantum computing in the financial sector. Our goal is to move beyond theoretical algorithms and explore scalable, real-world applications that can drive innovation in the industry.”

Through this initiative, Yonsei University aims to set a precedent for integrating quantum technologies into finance, offering a compelling example of convergence between cutting-edge ICT and the financial industry.