If blockchain and distributed ledger technology is only just being spoken about from an application point of view in financial services, then the fledgling science behind quantum computing (QC) has an uphill struggle on its hands.
“As an industry, there is a feeling that the digital revolution was missed somehow,” said Dr Stacey Jeffery, senior researcher at CWI, at Sibos 2018. “Perhaps it’s best to think about how and why that happened and how you can get on board with the quantum revolution before it passes by.”
Early QC adoption presents a huge challenge for tier 1 financial institutions, said Dr Leda Glyptis, CEO of challenger consultancy 11:FS Foundry and former head of innovation at BNY Mellon and Qatar National Bank.
“If the promise of QC is to do what we already do but a little bit better,” said Glyptis “the price tag and effort and involvement it requires from the industry is staggering. We’re having difficulty wrapping our head around what the holy grail is of the QC journey.”
But adoption of QC may not be a choice of if, rather when.
“The current security solutions will be broken by QC,” said Jeffery, “it will act as a gateway for organisations starting to care and invest in QC. From that point, we can develop the technology and its use cases.”
“There’s a lot of initial interest from the pharmaceutical and energy industries because they can see the benefits,” said Dr Ashley Montanaro, consultant at Q&I. “Initially, I expect to see lots of opportunities for consultancies which could be extremely valuable to the banking industry.
“It would be valuable for the banking industry to either engage directly in QC investment or with these support services to access QC,” said Montanaro.
“By talking directly to the experts in the financial sector is the only way for us as quantum scientists to identify the problems that QC can be applied to solve,” said Dr Alejandro Perdomo-Ortiz, senior research scientist at Rigetti.
While in its infancy, QC will be able to offer a handful of conditioned applications in financial services.
“A key challenge for near term quantum computers which are small is that it’s difficult to stick large amounts of classical data in it,” said Montanaro, “the more promising near future applications of QC are almost invariably where the problem size is small but the problem is fiendishly difficult; an example might be portfolio optimisation.
“I’d be very surprised if we don’t see quantum fintech springing up targeting financial applications,” he said.
Ultimately, QC is a long term investment for the banking industry, not necessarily from the technological or cost perspective but from a future talent shortage.
“It might not be for everyone to invest,” said Jeffrey, “but if you’re an organisation that already dedicates resources to R&D, you should consider engaging with the academic community by hiring a QC grad student who’ll become a future trained employee of your company.
“This will give you a hybrid between QC and the banking industry to identify and solve industry problems once it comes of age.”