Quantum Computing & Industry Vulnerabilities
Author: Go Studio
June 25, 2024

A good question to be asking right now is, “Is quantum computing the next frontier?” The computing environment is undergoing a huge change as the rush to enhance artificial intelligence eventually will give way to the quantum revolution. Over $40 billion in worldwide funding has been invested in quantum innovation in 2024. The financial services industry, among others, is anticipated to experience some of the greatest economic benefits from quantum computing. These industries could gain as much as $1.3 trillion in value by 2035. So what does this mean for finance and innovation?

What is Quantum Computing?

Quantum computing utilizes the principles of quantum physics to enhance computational power. Unlike classical computers, which use binary bits (0s and 1s), quantum computers use qubits. Qubits can exist in multiple states simultaneously due to superposition, allowing them to perform numerous calculations at the same time. Think of it like the multiverse, where a classical computer can only exist in one universe at a time, versus a quantum computer that can access data from all universes simultaneously. 

The Effects of Quantum Computing on Finance 

There is no clear-cut or simple way to look at how quantum computing is poised to affect the financial sector. The exponential increase in computational capacity has the potential to solve complex problems that classical computing systems have struggled with for a long time. And although it will certainly bring many opportunities, with them may come significant challenges.

Quantum computers have the potential to solve complex problems faster and more accurately than traditional computers. Because of this, they offer significant benefits to financial institutions like: 

  • Improved trade optimization
  • Risk profiling 
  • More precise credit scoring
  • Better fraud detection 
  • Improved portfolio management and financial forecasting 
  • Accurate financial market analysis

But, as “with great power comes great responsibility,” – quantum computing poses a significant threat to the financial sector’s infrastructure. That’s because the same computational power that enables advanced financial modeling could also break current cryptographic systems that secure digital transactions, exposing financial institutions to new vulnerabilities.

6 Quantum Technology Tips For Businesses in Financial Services

  1. Quantum banking offers a significant advantage in speed compared to traditional methods. Quantum computing processes data up to 10 million times faster than supercomputers. And financial institutions recognize the potential of quantum banking – 63% of executives identified new technologies, including quantum computing, as having the most substantial impact on banks in the next five years. 
  2. Companies that provide financial services ought to start thinking about how they will get ready for quantum computing technology. If you don’t, others may move more quickly in the near future and draw in the resources necessary for long-term industry success. 
  3. Four algorithms have been chosen by the National Institute of Standards and Technology (NIST) that are resistant to assault by quantum computers. Work has begun on standardizing these algorithms to more safely enable companies all across the world to access quantum technology. 
  4. Due to unprecedented speed and accuracy in analyzing complex financial data, such as credit risk assessment, quantum computing presents a compelling use case for risk management in banking. Chief Risk Officers (CROs) face increasing challenges due to a growing range of risks, including cyber threats and economic volatility. 
  5. Traditional risk management metrics may not fully capture the interconnected nature of these risks, highlighting the need for advanced technologies like quantum computing. As cyber risk becomes a top priority for CROs, the potential of quantum computing in banking to enhance risk management practices becomes increasingly relevant. 
  6. Among its many advantages to the financial sector, quantum computing will also offer more precise models, quicker processing speeds, and customized policy alternatives.

Key Advancements in Quantum Computing 

Major players like Google, Microsoft, and IBM have been at the forefront of advancing quantum computing technologies for a few years. IBM unveiled the first quantum computer at a university campus in 2024, marking a significant milestone in the quantum computing journey. The first institution in the world to host an IBM Quantum System One is presently Rensselaer Polytechnic Institute (RPI). However, despite these strides, the practical applications of quantum computing remain to be seen. There are also many questions surrounding security and safety. 

Looking at Quantum – Safe Applications

As quantum computing gets closer to becoming a reality, concerns about cybersecurity are becoming more significant. Encryption techniques, which are used today to safeguard everything from company data, documents, emails, and more, to banking and retail transactions, can be broken by quantum computers at an alarming rate. The computational power of quantum algorithms is significant. And so that means traditional encryption methods, which were once considered very secure, could become obsolete. 

Organizations must develop quantum-safe applications that can withstand quantum attacks in order to protect sensitive data and critical infrastructure. Right now, businesses need to proactively identify vulnerable systems and create strategies to transition to quantum-resistant architectures in the coming years. 

The Role of Education in Shaping the Future of Quantum Computing

In 2019, Google’s quantum computer, Sycamore, achieved a groundbreaking feat. It completed a task in just about 200 seconds that would take the most powerful classical supercomputer around 10,000 years. Driven further by developments in AI, this marked a significant move forward in quantum computing advancements. However, it’s been five years since this milestone, and discussions around integrating quantum computing literacy into K-12 education remain limited.

Education is crucial for driving innovation and discovery in the field of quantum computing. Collaborative efforts between academia, industry, and government are essential for nurturing the next generation of quantum scientists and engineers. Stakeholders need to invest in research and educational initiatives to speed up the pace of quantum development.

In the quantum market, there is typically only one eligible applicant for every three job vacancies. And by 2025, fewer than half of all quantum computing positions are anticipated to be filled. As you can see, there is a critical gap in preparing the next generation for a future where quantum technologies are commonplace. 

Without proactive steps to embed quantum concepts into curriculums now, there’s a risk of falling behind. These technologies will continue to become integral to various sectors. A tailored quantum literacy program for K-12 can introduce students progressively to concepts like superposition, quantum mechanics and real-world applications. The scarcity of qualified candidates needs to be addressed. It’s important to ensure readiness for the evolving technological landscape where AI and quantum computing intersect to solve complex problems across diverse fields.

Navigating the Quantum Frontier With Go Studio

As quantum computing technology evolves and becomes more real, business leaders need to keep up with the coming changes. It’s important to get ready for the future. This means using quantum-safe technologies, investing in education, and finding specific uses for quantum technology for relevant industries. 

If you’re grappling with the complexities of quantum computing, and are curious to learn more. You are invited to join Go Studio’s upcoming Quantum Computing Event on July 24th, 2024. Gain insights from industry experts, explore quantum-safe strategies, and chart a course toward a quantum-ready future. Register now to secure your spot. 

Key Takeaways:

  • The computing environment is undergoing a huge change as the rush to enhance artificial intelligence eventually will give way to the quantum revolution. 
  • The financial services industry, among others, is anticipated to experience some of the greatest economic benefits from quantum computing.
  • Quantum computers have the potential to solve complex problems faster and more accurately than traditional computers. Because of this, they offer significant benefits to financial institutions.
  • Encryption techniques, which are used today to safeguard everything from company data, documents, emails, and more to banking and retail transactions, can be broken by quantum computers at an alarming rate.
  • In 2019, Google’s quantum computer, Sycamore, achieved a groundbreaking feat. It completed a task in just about 200 seconds that would take the most powerful classical supercomputer around 10,000 years. 

Four algorithms have been chosen by the National Institute of Standards and Technology (NIST) that are resistant to assault by quantum computers. Work has begun on standardizing these algorithms to more safely enable companies all across the world to access quantum technology.

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