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International Conference on Cybersecurity, Digital Forensics, and AI Applications (ICCSDFAI)

Quantum Optimization for Finance: Algorithms, Hybrid Pipelines, and the State of Practical Advantage in the NISQ Era

Batuhan Hangun, Oğuz Altun, Önder Eyecioğlu, Korhan Kayışlı, Murat Beken

Published Jun 1, 2026• 0 citations
Publisher
DOI
10.1109/iccsdfai70505.2026.11647992

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Quantum ant colony optimization (QACO) has drew much attention since it combines the advantages of quantum computing and ant colony optimization (ACO) algorithm overcoming some limitations of the traditional ACO algorithm. However,due to the hardware resource limitations of currently available quantum computers, the practical application of the QACO is still not realized. In this paper, we developed a quantum-classical hybrid algorithm by combining the clustering algorithm with QACO algorithm.This extended QACO can handle large-scale optimization problems with currently available quantum computing resource. We have tested the effectiveness and performance of the extended QACO algorithm with the Travelling Salesman Problem (TSP) as benchmarks, and found the algorithm achieves better performance under multiple diverse datasets. In addition, we investigated the noise impact on the extended QACO and evaluated its operation possibility on current available noisy intermediate scale quantum(NISQ) devices. Our work shows that the combination of the clustering algorithm with QACO effectively improved its problem solving scale, which makes its practical application possible in current NISQ era of quantum computing.
The Noisy Intermediate-Scale Quantum (NISQ) era, defined by qubit counts in the hundreds and gate error rates that preclude long coherence times, imposes severe constraints on purely quantum computation. The central problem is that achieving practical quantum advantage for real-world tasks must overcome these hardware limitations, yet fault-tolerant quantum computers with full error correction remain years away. To address this, we present a systematic survey of hybrid classical-quantum computing models, in which classical high-performance resources orchestrate the workflow, perform iterative optimization, and apply error mitigation to noisy quantum processing units. Our review encompasses variational quantum algorithms, such as the variational quantum eigensolver and quantum approximate optimization algorithm; classical optimizers tailored for noisy quantum landscapes; error mitigation techniques including zero-noise extrapolation and probabilistic error cancellation; and circuit knitting that partitions large circuits across small QPUs. We find that these hybrid architectures have already demonstrated domain-specific utility in quantum chemistry for molecular ground-state estimation, in logistics and finance for combinatorial optimization, and in machine learning for generative and recommendation models. Notably, they often surpass purely classical or purely quantum approaches on carefully chosen benchmarks. The evidence indicates that hybrid classical-quantum systems are not a temporary stopgap but a durable paradigm. Their role will persist into the early fault-tolerant era, where small, logical qubits will similarly require classical coordination. Consequently, the field urgently demands the establishment of standardized hybrid performance benchmarks, the maturation of robust quantum-classical middleware capable of efficient transpiration and execution management, and holistic co-design frameworks that seamlessly integrate hardware constraints, software stack layers, and application-specific requirements from the outset.