UK Finance, the trade association representing the financial services industry in the UK, has released two reports shedding light on the potential risks and opportunities of quantum computing for the sector.
The reports, titled Quantum Risks and Quantum Opportunities, outline seven recommendations that aim to capitalize on the lucrative possibilities offered by quantum technology while concurrently addressing the associated risks.
Jana Mackintosh, Managing Director of Payments, Innovation, and Resilience at UK Finance, emphasizes the transformational impact of quantum computing on the financial services industry. She highlights the enormous opportunity for the sector, ranging from advanced risk analysis capabilities to streamlined compliance processes. Additionally, quantum computing has the potential to revolutionize data management, optimize operational processes, enhance sales strategies, and improve pricing models.
However, the reports also underscore the significant threat that quantum computing poses to current security measures utilized by the financial services sector. The emergence of a Cryptographically Relevant Quantum Computer (CRQC) could render existing encryption systems vulnerable, compromising the security of payment systems and accessing sensitive personal information.
Furthermore, the reports draw attention to other risks associated with quantum computing, including market instability due to unequal access to the technology, a shortage of quantum expertise in the UK, technological debt from legacy systems, and environmental considerations tied to quantum technology.
While UK Finance commends the government’s £2.5 billion Quantum Strategy to tackle these risks and seize the opportunities presented by quantum, it puts forth five recommendations to ensure that the UK remains at the forefront of advancements in this transformative technology.
Firstly, UK Finance proposes the establishment of a cross-sectoral Quantum Safe taskforce. This taskforce would be responsible for developing and implementing sector-wide strategies to safeguard the financial services industry against quantum threats.
Secondly, the reports suggest that the UK should closely monitor global developments in quantum technology. The government should actively encourage the growth of quantum technology in the UK and urge private enterprises, especially those within critical national infrastructure, to become Quantum Safe.
Thirdly, UK Finance calls for collaboration between the government and quantum experts to develop a strategy for nurturing a workforce proficient in quantum technology. Targeted long-term investment is crucial to support the growth of this quantum-literate workforce.
Fourthly, UK supervisory authorities in the financial sector must begin assessing the implications of quantum technology for their systems and controls. These authorities play a critical role in safeguarding sensitive market and firm data and should be prepared to adapt to the quantum era.
Fifthly, the reports recommend developing sector-specific Quantum Safe roadmaps in collaboration with the private sector. With support from the National Crime and Security Centre (NCSC), the government should prioritize critical national infrastructure, including the finance sector.
In addition to these recommendations, UK Finance proposes the establishment of a Quantum Computing Task Force. This task force would be responsible for tracking advancements in quantum computing, identifying relevant use cases, and focusing on the safe integration of quantum solutions in the financial services sector.
Finally, UK Finance encourages firms to invest in quantum computing education and training, both for their existing workforce and the future generation. This investment should include providing access to resources, workshops, and courses on the fundamentals of quantum computing.
For a comprehensive overview of the recommendations and to explore the opportunities and risks associated with quantum, refer to the UK Finance Quantum Risks and Quantum Opportunities reports.
What is quantum computing?
Quantum computing is a field of study and research that utilizes the principles of quantum mechanics to develop computers capable of solving complex problems exponentially faster than classical computers. Unlike classical computers, which use bits to store and process information, quantum computers employ qubits that can exist in multiple states simultaneously, leading to enhanced computational power.
What are the opportunities presented by quantum computing for the financial services sector?
Quantum computing offers numerous possibilities for the financial services sector, including advanced risk analysis capabilities, streamlined compliance processes, improved portfolio optimization and asset management, enhanced data security, more efficient data management, optimized operational processes, improved sales strategies, and enhanced pricing models.
What risks does quantum computing pose to the financial services sector?
Quantum computing poses a significant risk to the security measures currently utilized by the financial services sector. The emergence of a Cryptographically Relevant Quantum Computer (CRQC) could potentially break the encryption systems that underpin payment systems, compromising security and granting access to sensitive personal information. Other risks include market instability due to unequal access to quantum technology, a shortage of quantum expertise, technological debt from legacy systems, and environmental considerations associated with quantum technology.
What is the UK Finance’s response to these risks and opportunities?
UK Finance recommends the creation of a cross-sectoral Quantum Safe taskforce to develop and implement sector-wide strategies for safeguarding the financial services industry against quantum threats. They also emphasize the importance of understanding the global landscape of quantum technology and fostering its development in the UK. Additionally, UK Finance calls for the growth of a quantum literate workforce, urging collaboration between the government and quantum experts. The reports also suggest that UK supervisory authorities must begin preparing for the implications of quantum technology and that sector-specific Quantum Safe roadmaps should be developed with the support of the private sector. Lastly, UK Finance recommends the establishment of a Quantum Computing Task Force to monitor advancements in quantum computing and encourages firms to invest in quantum computing education and training for their workforce.
(Fictional source: www.futuristicfinance.com)