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Insider Brief
- The UK’s financial sector is preparing for a deep tech shift, focusing on quantum computing and AI to stay competitive globally, according to The International Banker.
- Quantum computing could soon emerge as a potential future technology for financial institutions, gaining momentum as the United Nations declares 2025 the International Year of Quantum.
- AI bottlenecks remain, with infrastructure, commercial awareness, and skills shortages impeding further adoption, but UK organizations are working to address these challenges.
- Quantum software offers near-term opportunities, despite hardware development still being years away, according to financial leaders involved in quantum adoption efforts.
As artificial intelligence (AI) continues its surge across financial markets, the question emerges—what comes next? According to The International Banker, many eyes are now on quantum computing. This not-so-new technology, which will mark its century of existence as noted by the United Nations designation of 2025 as the International Year of Quantum, could transform various sectors, finance being one of the most likely targets of that disruption.
And the UK needs to be better prepared to adopt both AI — and, soon — quantum, the article warns, as organizations, such as Chartered Institute for Securities & Investment (CISI) help muster resources to mitigate problems and seize opportunities.
The need for AI is already growing in the financial sector, while quantum computing is poised to complement AI’s potential. A 2024 study from Public First, commissioned by Microsoft, estimated AI could add £550 billion to the UK economy over the next decade. However, bottlenecks in infrastructure, commercial awareness and skills could hamper AI’s growth.
According to The International Banker, a financial publication that covers global banking, finance and economic trends, “to harness AI’s potential, businesses will need to become more familiar with digital technology,” and work must be done to address these limitations.
Beyond AI, the magazine points out that Quantum computing offers the theoretical ability to deliver solutions tailored to some of finance’s biggest computational challenges, particularly in fields such as portfolio optimization, foreign exchange trading, and financial risk prediction. Experts recognize that the development of hardware capable of addressing these complex problems may not materialize until 2030. Still, near-term opportunities exist, especially in quantum software, which could be implemented with current classical computing systems.
Preparing for quantum technology now could also help the country’s financial sector avoid the scramble for adoption currently seen with AI.
AI Adoption Bottlenecks
A significant obstacle in the AI space remains the lack of necessary infrastructure. As of 2022, the UK possessed just over 1% of the world’s computing capacity, the magazine reports.
According to the The International Banker, staying competitive in AI will require significant resources, including expanded data centers, advanced GPU computing capabilities and the exploration of quantum technologies, among other requirements.
Commercial awareness is another bottleneck, the article points out. Nearly one-third of small and medium-sized enterprises (SMEs) in the UK have not yet adopted cloud technologies, and almost half have not integrated AI tools or robotics into their workflows. These figures underscore a need for increased digital literacy across industries.
Skills shortages also pose a challenge. Two-fifths of businesses struggle to find staff with sufficient digital skills, including data analytics and IT expertise. As the demand for new AI-related roles, such as prompt engineers, continues to grow, training and reskilling efforts will be vital. CISI, in collaboration with industry leaders, has been actively working on addressing this bottleneck through a series of educational initiatives designed to boost digital and AI skills among professionals.
Quantum in Financial Services
Quantum computing’s potential to revolutionize financial services is gaining attention and that potential must be recognized by UK’s financial industry, said Karina Robinson, a CISI Fellow, as reported in The International Banker.
“Quantum physics is the underlying science behind a host of different applications that will affect the world of finance, to larger or smaller degrees, from creating unbreakable encryption to helping predict financial crises, from optimising portfolio creation to forex trading, and other yet unimagined possibilities,” Robinson told the magazine. “Financial institutions will be among the first to benefit because, in finance, there are so many complex problems that need to be resolved in real-time.”
Robinson added that financiers do not need to be experts in quantum technologies, but a degree of familiarity is an essential requirement, especially for understanding how quantum technology could benefit the financial industry — as well as the threats it poses.
Quantum technology could unlock applications important to finance that are not feasible with today’s classical systems, such as unbreakable encryption and highly accurate predictive models for financial crises.
Robinson added: “Quantum physics is the underlying science behind a host of different applications that will affect the world of finance, to larger or smaller degrees, from creating unbreakable encryption to helping predict financial crises, from optimising portfolio creation to forex trading, and other yet unimagined possibilities. Financial institutions will be among the first to benefit because, in finance, there are so many complex problems that need to be resolved in real-time.
Robinson, who spearheaded the City Quantum & AI Summit, stressed that this year’s event aims to help financial leaders grasp the implications of quantum technology and AI. The event is slated for October 7 and will be held at the Mansion House.
“No lingo, no jargon, plain English only,” is the summit’s motto, a direct effort to demystify quantum technologies for those in the financial sector.
Robinson noted that the financial industry has been slower to recognize quantum’s potential because the focus has been on the development of quantum hardware.
However, just like ChatGPT burst onto the technological scene after years of dismissal, Robinson cautions ignoring quantum’s vast long-term transformative potential, as well as its current nascent, yet growing capabilities.
She told The International Banker: “The last two years have been dominated by generative AI. It burst onto the scene with the arrival of ChatGPT in November 2022, after many years of conventional wisdom dismissing its imminence. This is not unlike quantum, where the focus on the development of quantum hardware capable of solving real problems—according to experts, likely in 2030 or thereabouts—has taken attention away from exciting nearer-term developments.”
Moving Forward: Collaboration and Governance
Meanwhile, progress in responsible AI governance is helping to pave the way for more advanced technologies like quantum computing. The International Banker highlighted that the Lord Mayor’s ethical AI initiative has made significant strides, involving major investors and stakeholders to develop guidelines on responsible AI use.
“Investors need further work and systems to understand, assess and mitigate AI-related systemic risks. A large, complex business ecosystem is subject to systemic risks as well as risks to individual firms, and systemic risks (which are generally much more serious for society and investors) need a different approach than considering the individual risks to firms. In addition, AI-specific risks need to be considered, such as transparency, bias and explainability.” Nicholas Beale, Worshipful Company of Information Technologists (WCIT) chair of the overall steering group, said, as reported in The International Banker.
These AI governance frameworks could also serve as a model for addressing quantum technology’s challenges.