A Preprocessing Perspective for Quantum Machine Learning Classification Advantage in Finance Using NISQ Algorithms

Quantum Machine Learning (QML) has not yet demonstrated extensively and clearly its advantages compared to the classical machine learning approach. So far, there are only specific cases where some quantum-inspired techniques have achieved small incremental advantages, and a few experimental cases in hybrid quantum computing are promising, considering a mid-term future (not taking into account the achievements purely associated with optimization using quantum-classical algorithms). The current quantum computers are noisy and have few qubits to test, making it difficult to demonstrate the current and potential quantum advantage of QML methods. This study shows that we can achieve better classical encoding and performance of quantum classifiers by using Linear Discriminant Analysis (LDA) during the data preprocessing step. As a result, the Variational Quantum Algorithm (VQA) shows a gain of performance in balanced accuracy with the LDA technique and outperforms baseline classical classifiers.