UK Finance trade has called on the government to create a quantum technology taskforce to help exploit the technology's opportunities and guard against potential future risks.
With financial services identified as a prime sector to exploit quantum technology, the association has commissioned two reports, carried out by IBM Consulting, looking at Quantum Risks and Quantum Opportunities.
"Quantum computing is going to transform the financial services industry, it’s just a matter of when," says Jana Mackintosh, managing director of payments, innovation & resilience at UK Finance.
"It represents a multibillion-pound opportunity, from new levels and speeds of risk analysis to radically streamlining compliance processes that currently cost the sector billions every year."
The opportunities, according to the report, include enhancing risk analysis capabilities, streamlining compliance processes, improving portfolio optimization and asset management, securing sensitive data, and revolutionizing data management.
Potential uses cases for the technology also apply to optimization of operational processes, enhancing sales strategies, and improving pricing models, industry stakeholders believe.
However, according to research, there are also existential risks associated with quantum technology.
"The reality is that when a Cryptographically Relevant Quantum Computer is developed, it could break the encryption underpinning all payments and electronic commerce," Mackintosh warned.
"We must be ready. Industry and government must work together now to secure the financial services industry against these threats, and put the UK at the head of the pack to seize the opportunities."
‘Quantum Safe’ taskforce
UK Finance, which represents 300 banking and finance companies, is now calling for the creation of a 'Quantum Safe' taskforce to develop and implement transformation strategies. The proposed taskforce would represent the entire financial services ecosystem as well as critical national infrastructure.
This research report shares insight on how to make your data security more robust
DOWNLOAD NOW
This taskforce, it said, should keep track of advancements in quantum computing, identify potential use cases relevant to the financial services sector, and develop a strategic roadmap for safely integrating quantum solutions.
The association also called for closer collaboration between the National Cyber Security Centre (NCSC) and the private sector to develop sector-specific quantum safe roadmaps, starting with 13 key areas of critical national infrastructure, including finance.
UK Finance also wants the UK to be 'vigilant' about other nations' work in the field, to invest in skills growth, to educate supervisory authorities and encourage firms to invest in education and training.
Early exploration of quantum technology
Financial institutions are already dipping their toes into the water of quantum computing.
Earlier this year, for example, HSBC signed a deal with Terra Quantum to explore the possibilities for collateral optimization - efficiently allocating and managing collateral assets to meet regulatory requirements, while minimizing costs.
Quantum technology, the bank believes, may help it handle larger and more complex optimization problems.
Other financial organisations too, including Goldman Sachs and JP Morgan Chase, are also experimenting with the technology.
In March this year, the government published its National Quantum Strategy, a 10-year plan supported by up to £2.5 billion in funding.
As part of this move, secretary of state Michelle Donelan pledged to "make the UK the home for cutting-edge scientific breakthroughs, the best place in the world to start and grow a quantum business, a leading voice in the international quantum and tech community, and a magnet for international quantum talent."
