Why Quantum Computing Matters for Financial Services

 

This panel discussion at the Singapore FinTech Festival explored the transformative potential of quantum computing in financial services, highlighting opportunities, challenges, and practical applications. 

Key Highlights 
1. Quantum computing’s transformative potential 

  • Revolutionary capabilities: 
    • Quantum computing offers exponential speed and processing power compared to classical computing. Julian Tan, IBM Supply Chain Transformation & Quantum Business Development Executive, referred to the current era of quantum as the “Quantum Utility Era”, which means that while quantum computers today are imperfect, they already have the capability to produce more precise results than the best brute force, classical computing methods. 
    • Financial institutions can address highly complex problems, such as portfolio optimization and risk analysis, more efficiently. Classical computing is faster at optimising for a single objective. Yet, multi-objective problems are common in finance, where the best outcomes which balances risk, sustainability and profit need to be found. 

  • Game-changing use cases: 
    • Fraud detection and prevention through enhanced data processing. 
    • Portfolio optimisation through simulations for market forecasting, improving decision-making for investments. 
    • Cryptographic applications to enhance cybersecurity in financial services. 


2. Bracing for quantum risks 

  • Encryption Vulnerability: 
    • Quantum computing’s ability to break traditional encryption models like RSA2048, Delphi-Hellman, and elliptical curve encryption poses a significant threat to sensitive financial data. 
    • This vulnerability could render current security protocols obsolete, exposing critical data to misuse. 
    • The advent of cryptographically-relevant quantum computers (CRQCs), capable of prime number factorisation via algorithms like Peter Shor’s, endangers the majority of asymmetrical encryption used for data in transit. 

  • Development of Post-Quantum Cryptography (PQC): 
    • The National Institute of Science and Technology (NIST) initiated a global call in 2016 to develop PQC. After rigorous evaluation, three encryption standards were finalized in 2023 for key encryption, digital signatures, and public key infrastructures. 
    • PQC adoption demands significant industry-wide transformation and agility in cryptographic practices. 

  • Timeline for Quantum-Ready Systems: 
    • Full-scale fault-tolerant quantum computers are anticipated by 2029, per industry roadmaps like IBM's. 
    • Organisations must act now to protect critical data against ""harvest-now-decrypt-later"" attacks, where encrypted data is stored today for decryption in the quantum future. 


3. Challenges to quantum adoption 

  • Technical hurdles: 
    • Limited availability of robust quantum hardware and the need for error correction. 
    • The initial deployment of quantum technologies is expected to be a hybrid of classical and quantum computing. However, integration with classical systems remains a significant barrier. 

  • Talent and skill gaps: 
    • A shortage of quantum computing expertise hampers industry adoption. 
    • Financial institutions need to upskill existing teams or hire quantum specialists. 

  • Cost considerations: 
    • High costs associated with quantum computing infrastructure pose a challenge for widespread implementation. 


4. Preparing for the quantum era 

  • Quantum literacy for all 
    • Introduce foundational quantum computing concepts to existing staff to demystify the technology and its potential applications. 
    • Partner with educational institutions to create quantum-focused curricula for upskilling and reskilling professionals 
    • Platforms like IBM's Qiskit textbook offer free tools for learning quantum computing basics and experimenting with real quantum systems. 
    • Government agencies like Singapore’s National Quantum Office provide free access to open-source platforms for exploration. 

  • Workplace initiatives: 
    • Invest in quantum-related research and collaborate with universities to cultivate specialized talent in relevant fields. 
    • Engage in academic and industry initiatives such as internships and hackathons to raise awareness among students and professionals about opportunities in quantum computing. 

  • Embracing diverse skillsets: 
    • Expand hiring criteria beyond traditional finance roles to include data scientists, quantum physicists, and software engineers. 
    • Foster interdisciplinary teams where finance professionals collaborate with quantum computing and cybersecurity experts to solve complex challenges. 

  • Role of skills-first learning: 
    • Transition from long-term academic pathways like PhDs to short, targeted training programs for immediate applicability in the workplace. 
    • Promote DIY and flexible learning models that combine hands-on experience with incremental course completion over time. 


Conclusion:
Quantum computing has the potential to revolutionize financial services, but overcoming challenges like technical barriers and talent shortages will require strategic planning, collaboration, and proactive experimentation. 

 

Watch Full Session

 

Speakers:

  • Julian Tan, IBM Supply Chain Transformation & Quantum Business Development Executive, IBM
  • Michael Low, Deputy Director, Curriculum Development & Digitalisation and Head, Finance & Technology Programmes, Singapore Management University
  • Prof. Ying Chen, Director of Centre for Quantitative Finance, National University of Singapore

 

Moderator:

  • Shadab Taiyabi, President, Singapore FinTech Association

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