The reports Quantum Risks and Quantum Opportunities together set out seven recommendations including the creation of a quantum taskforce, to seize the multibillion-pound opportunities from the technology while also guarding against the risks.

Jana Mackintosh, Managing Director of Payments, Innovation & Resilience at UK Finance, commented: “Quantum computing is going to transform the financial services industry, it’s just a matter of when. 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. We cannot ignore the risks, however, and the reality that when a Cryptographically Relevant Quantum Computer is developed, it could break the encryption underpinning all payments and electronic commerce.

“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. In these reports, we set out five recommendations to do just that and ensure the UK is not just quantum safe, but ready to lead in this transformational technology.”

Risks and opportunities:

The reports find that quantum computing will create opportunities for the financial services sector in eight key areas. These are: enhancing risk analysis capabilities, streamlining compliance processes, improving portfolio optimisation and asset management, securing sensitive data, revolutionising data management, optimising operational processes, enhancing sales strategies and improving pricing models.

The reports, however, find that quantum is a formidable threat to the security measures currently used by the financial services sector. Unless firms are systematically safeguarded against this risk, a Cryptographically Relevant Quantum Computer (CRQC) would be able to unravel the security on all payments systems and access secure personally identifiable information.

The reports also highlight four other risks from quantum: possible market instability caused by unequal access to the technology, insufficient quantum talent in the UK, a technological debt from legacy systems, as well as a number of environmental considerations associated with quantum technology.

UK Finance welcomes the government’s £2.5 billion Quantum Strategy to address these risks and also seize the opportunities of quantum. However, they set out five recommendations to ensure the UK can match its ambitions:

Recommendation 1: Establish a cross-sectoral Quantum Safe taskforce. UK Government should create a financial sector task force mandated to develop and implement sector-wide Quantum Safe transformation strategies. It should represent all parts of the financial services ecosystem as well as national critical infrastructure.

Recommendation 2: Understand the global picture. The UK should be constantly vigilant of other nations’ work to develop quantum technology. Government should also go further to encourage the development of quantum technology in the UK at the same time as encouraging all private enterprise (particularly in critical national infrastructure) to become Quantum Safe.

Recommendation 3: Grow the quantum workforce. Government should work with quantum experts to develop a strategy for a quantum literate workforce, and support this with targeted investment in long-term workforce growth.

Recommendation 4: UK supervisory authorities must start their Quantum Safe journeys. UK financial authorities are pillars of the financial ecosystem that hold vast troves of sensitive market and firm data, and therefore must start understanding the implications of quantum for their systems and controls.

Recommendation 5: Develop targeted sectoral roadmaps. Government, with support from the National Crime and Security Centre (NCSC), should work with the private sector to develop sector-specific Quantum Safe roadmaps. This should begin with the 13 areas of critical national infrastructure (including finance).

Recommendation 6: Establish a Quantum Computing Task Force responsible for monitoring advancements in quantum computing, identifying potential use cases relevant to the financial services sector (and relevant subsectors). This should also as a priority work on developing a strategic roadmap for safely integrating quantum computing solutions.

Recommendation 7: Encourage firms to invest in quantum computing education and training for their existing workforce and also for the future workforce. This should include providing access to resources, workshops and courses on quantum computing fundamentals.

Read the full recommendations and list of opportunities and risks in the UK Finance Quantum Risks and Quantum Opportunities reports.