Quantum computing: a game-changing technology

UK Finance’s Digital, Technology and Cyber team has been increasing its engagement with industry and academia on quantum computing and its implications on the UK’s financial sector.

Quantum computing is a game-changing technology in the truest sense. For decades the prospect of quantum computing power being brought to bear on real world problem sets has been the realm of science fiction.

The 2020s, however, will be the long-awaited decade in which the exponential leaps in processing power of these machines, measured in “qubits”, will accelerate to the point where practical applications become a reality. While currently in the nascent stages of research and development, use cases are rapidly being explored, and these present the sector with both threats and opportunities.

In terms of opportunities, firms able to harness quantum computing power will almost certainly be in a position to gain a significant competitive edge on those that are not. This will be particularly apparent in areas such as risk balancing, hedging positions effectively, trading and the provision of highly personalised products to consumers. The primary unknown in this area however is # the timeframes for the development of this technology. Those firms looking for a tangible short-term ROI for a quantum program are likely to be frustrated – it is most definitely a long play.

In terms of threats, the sector as a whole will need to deal with the security implications that quantum computing technology poses to common cryptographic algorithms widely used to secure data. There is a consensus, among those with knowledge of cryptography, that firms should not be delaying the commencement of a project to review their entire IT ecosystems, both internal and third party. This is because of  the possibility of vulnerabilities that may be realised when quantum technology finds itself in the wrong hands.

With 2022 witnessing both the signing of the Biden administration’s “Quantum Computing Cybersecurity Preparedness Act” and the U.S. Department of Commerce’s National Institute of Standards and Technology (NIST) reaching milestones in their post-quantum cryptographic standards project, it is increasingly evident that this technology is emerging from the shadows. UK Finance will continue to pay close attention to developments in the field and remain prepared to engage with the sector on the issues it presents.