By: Nghilunanye Petrus
As banks prepare for a quantum technology-driven future, the World Economic Forum (WEF) releases a new report outlining a fundamental shift in financial systems and how banks ought to prepare for quantum disruption. The report, compiled in collaboration with Accenture, emphasizes that quantum innovation is no longer on the horizon; it’s already being piloted, tested, implemented in some financial sectors around the world.
Among the most pressing issues discussed in the report is quantum security. As quantum computers progress towards having the capability to break existing cryptographic algorithms, financial systems are in a race against the clock. If a quantum computer becomes capable of factoring large numbers effectively – something beyond the realm of conventional computers – it could completely render Rivest Shamir Adleman (RSA) and elliptic curve encryption obsolete. This poses a great threat to systems such as e-banking and financial blockchains.
Banks like HSBC, Banco Sabadell, and Singapore’s central bank are already experimenting with post-quantum cryptography (PQC) and quantum key distribution (QKD) to get ahead of these threats. The stakes are high: a failure to transition to quantum-safe systems could result in significant data breaches and a breakdown of confidence in global finance.
Along with security, quantum computing offers breakthrough capabilities in risk modelling, fraud prevention, and portfolio optimisation. Turkish bank Yapı Kredi, for instance, used quantum computing to analyse the financial condition of 4,297 small and medium-sized enterprises (SMEs), identifying systemic risks in a few seconds; a process that would otherwise take years. Additionally, Intesa Sanpaolo in Italy tested quantum machine learning for fraud detection and achieved greater accuracy than traditional models.
These examples illustrate how quantum computing not only improves cybersecurity, but also operational effectiveness and market performance. Yet, it has some negative points too. The same way it could be employed to secure systems, it could be utilised counter-productively if not coupled with other protective measures. Hence, the WEF promotes a “defence-in-depth” approach combining PQC, QKD, and the quantum random number generator (QRNG) to provide multi-layered security.
Quantum sensing, another quantum mechanics application, is also beginning to gain importance. Although still in its early stages, quantum clocks would provide precise time stamps for high-speed trading, thus increasing regulation and transparency of the market. These clocks are already being researched and developed at research centres like the University of Strathclyde in Scotland.
For emerging markets like those in Africa, readiness for quantum technology is not an option. While the cost may be high and the learning curve steep, the cost of doing otherwise could be higher. It may be in the interest of African states to audit their cryptographic infrastructures, build regional capability, and adopt international standards to ensure financial security in the quantum era.
