The Quantum Column: Quantum computing in banking

Welcome to the first edition of my Quantum Column, where I explore one of the defining technological shifts of our time through the lens of financial services, payments, digital infrastructure, and society.

In this opening piece, we focus on a topic moving steadily from scientific theory into boardroom reality: quantum computing.

While AI continues to dominate headlines and conference agendas, something equally transformative is happening more quietly in the background. Governments are investing billions into quantum research (USD +55 billion since 2013), private and corporate funding exceeds USD 20 billion since 2014, national strategies are accelerating across Europe, the US, and Asia, and technical breakthroughs are compressing the timeline for commercial deployment. What once looked decades away is now increasingly discussed in terms of the early 2030s.

For banks and payment providers, this is no longer an academic conversation. Quantum computing has the potential to reshape competitiveness, cybersecurity, infrastructure resilience, and even the foundations of trust underpinning financial systems.

The question is no longer whether financial institutions should pay attention. The real question is whether they are preparing quickly enough.

The ‘what’: understanding quantum computing

Before diving into the implications for banking, let’s demystify the technology.

Traditional computers process information using bits, binary units represented as either 0 or 1. Every transaction, fraud check, payment instruction, and risk calculation ultimately runs on this binary logic.

Quantum computers operate differently. Instead of bits, they use qubits, which exploit three principles of quantum mechanics: superposition, entanglement, and interference.

Superposition allows qubits to exist in multiple states at the same time. Entanglement links qubits together so that the state of one influences another instantly, and interference helps quantum systems amplify correct outcomes while reducing incorrect ones.

In practical terms, this means quantum computers can process many possibilities simultaneously rather than sequentially.

And the scale is mind-bending. A theoretical 300-qubit machine could represent more computational states than there are atoms in the observable universe.

Before anyone panics and assumes classical computers are about to become obsolete, let’s clear up one of the biggest misconceptions: quantum computers are not simply ‘super-fast computers’. They are specialised systems designed to solve certain categories of problems dramatically more efficiently than classical machines.

For many everyday tasks, your laptop will remain perfectly adequate. But for optimisation, simulation, cryptography, and highly complex modelling, quantum computing could become transformative.

And those happen to be precisely the areas sitting at the heart of modern finance.

Why financial services should care

Financial services are fundamentally computational businesses. Every payment, credit decision, liquidity calculation, fraud assessment, and trading strategy depends on processing vast amounts of data at speed and scale.

Quantum computing matters because some of the industry’s hardest problems are exactly the kinds of problems quantum systems may eventually solve best.

Banks today generate and analyse petabytes of information daily: transaction flows, market movements, customer behaviour, macroeconomic signals, and risk exposures. Classical systems cope by approximating outcomes. Quantum systems could potentially analyse exponentially larger combinations simultaneously.

That changes the game.

Risk management: from days to minutes?

Let’s start with one of banking’s least glamorous but most important functions: risk management.

Under Basel III requirements, banks perform enormous Value-at-Risk simulations across countless market scenarios. These calculations can take hours or even days on conventional infrastructure.

Quantum-enhanced Monte Carlo simulations could dramatically reduce processing times, potentially enabling near real-time stress testing.

During periods of extreme market volatility, institutions could assess risk exposures almost instantly instead of waiting overnight for systems to finish calculations.

McKinsey estimates that quantum applications in finance could unlock capital efficiency gains of 20 to 50 percent, potentially freeing billions for lending and investment activity.

Several major institutions are already experimenting. Quantum pilots exploring collateral optimisation and portfolio balancing have shown measurable efficiency improvements.

For Chief Risk Officers and treasurers, this is no longer science fiction. It is a preview of a world where faster, more accurate decision-making becomes a competitive advantage.

Trading: the ultimate arms race

Now let’s move to the glamorous side of finance.

High-frequency trading already competes on microseconds. In that environment, even marginal informational advantages can translate into enormous profits.

Quantum systems introduce the possibility of analysing millions of portfolio permutations simultaneously, identifying arbitrage opportunities invisible to classical systems.

Portfolio optimisation is particularly interesting because markets involve enormous numbers of interdependent variables and constraints. Classical systems struggle as complexity grows exponentially. Quantum systems are specifically designed for these optimisation challenges.

Banks and asset managers are already experimenting with quantum applications for derivatives pricing, portfolio construction, and market simulation.

In financial markets, nobody needs to be infinitely faster than competitors. Sometimes being slightly smarter is enough.

Fraud detection and financial crime

With more than USD 4 trillion global loss in 2025 due to financial crime, one of the most commercially relevant use cases may ultimately sit in payments and fraud prevention.

Financial crime networks generate increasingly sophisticated transaction patterns across billions of data points. Detecting suspicious behaviour while avoiding excessive false positives remains one of the industry’s biggest headaches.

Quantum graph analysis and quantum machine learning models could help identify hidden relationships and anomalous behaviours far more effectively than current systems.

The World Economic Forum has highlighted quantum machine learning’s potential to reduce false positives significantly in fraud detection environments.

For payment providers, quantum computing could eventually help achieve the holy grail: lower fraud and smoother customer experiences at the same time.

The security threat no one can ignore

For all the excitement surrounding innovation, the biggest immediate concern for banks may actually be defensive rather than offensive.

Quantum computing poses a direct threat to the cryptographic foundations of the modern financial system.

Most of today’s digital infrastructure, from online banking and payment authentication to secure email, VPNs, and crypto wallets, depends on encryption standards such as RSA (the Rivest-Shamir-Adleman algorithm from 1977) and elliptic curve cryptography (ECDSA).

These systems are secure because classical computers cannot efficiently solve the underlying mathematical problems.

Quantum computers may eventually change that entirely.

This risk is primarily associated with Shor’s Algorithm, developed by mathematician Peter Shor in 1994. The algorithm theoretically enables sufficiently powerful quantum computers to factor large numbers exponentially faster than classical machines, effectively breaking RSA encryption.

If realised at scale, the implications would be profound.

Digital identity systems, mobile wallets, remote banking infrastructure, SWIFT communications, and even parts of blockchain infrastructure could become vulnerable.

And then there is the increasingly worrying ‘harvest now, decrypt later’ threat.

Adversaries are already collecting encrypted data today with the expectation that future quantum computers will eventually decrypt it.

In other words, data stolen now could become readable years later.

That means the quantum threat has already begun.

Enter post-quantum cryptography

The financial industry’s answer is Post-Quantum Cryptography, or PQC.

PQC does not require quantum computers to function. Instead, it uses mathematical approaches believed to be resistant to both classical and quantum attacks.

Examples include lattice-based cryptography, hash-based systems, and error-correcting codes.

After years of testing, the US National Institute of Standards and Technology finalised its first PQC standards in 2024.

Migration timelines are now accelerating globally.

NIST has effectively signalled that organisations should begin transitioning toward quantum-resistant cryptography before the end of the decade. The EU is operating on a similar timeline.

For banks, this is not a simple software upgrade.

Financial institutions often operate deeply embedded legacy systems spanning decades, making cryptographic migration a multi-year operational challenge involving infrastructure, vendors, cloud providers, payment schemes, and regulators.

The institutions that start late may simply run out of time.

Europe’s quantum race

The EU’s Quantum Europe Strategy, backed by more than one billion euros in funding, aims to position Europe as a leader in quantum infrastructure, cybersecurity, and industrial deployment.

The UK has committed 2.5 billion pounds through its National Quantum Strategy, with significant focus on fault-tolerant systems and commercialisation pathways.

Switzerland is emerging as a particularly interesting player for financial services, positioning itself as a neutral testing ground for banking and financial pilots.

This matters because quantum computing is increasingly treated as a matter of economic sovereignty and strategic competitiveness.

Countries that lead in quantum capabilities may gain advantages not only in science but also in finance, cybersecurity, and geopolitical influence.

So, when does quantum really arrive?

This remains the trillion-dollar question.

Practical RSA-breaking quantum computers still require millions of stable, error-corrected qubits, capabilities that are not yet available.

Many experts believe large-scale disruption remains years away.

But the timeline is compressing.

Breakthroughs from companies including IBM, Google, and Quantinuum suggest commercially meaningful applications may emerge much sooner than previously expected.

Even if fully fault-tolerant systems take another decade, the transition work for banks must begin now because infrastructure migration cycles are exceptionally long.

The reality is that financial services cannot afford to wait for certainty.

Institutions already experimenting today may secure five-to-ten-year advantages over slower competitors.

Quantum computing may not replace classical systems tomorrow. But it is steadily moving from theoretical promise to operational inevitability.

For banks, payment providers, and fintech firms alike, the challenge is no longer understanding whether quantum matters.

It is deciding how prepared they want to be when it does.

Your five-step quantum readiness checklist 1. Inventory and prioritise Catalog all cryptography across infrastructure, payment rails, PKI, TLS, HSMs, and customer channels. Prioritise systems supporting critical services and long-lived sensitive data. 2. Map dependencies Identify dependencies across cloud providers, processors, schemes, acquirers, and third-party vendors. Request concrete PQC migration roadmaps from strategic suppliers. 3. Build crypto-agility Remove hard-coded cryptography and centralise algorithm management wherever possible. 4. Test hybrid approaches Begin piloting hybrid cryptographic environments combining classical and post-quantum methods. 5. Govern the migration Treat quantum readiness as a long-term transformation programme, not a one-off technology upgrade.

The institutions that begin preparing now will already be ahead of much of the market.

Because in quantum, waiting for certainty may ultimately become the greatest risk of all.

And the smartest move banks can make right now is not buying a quantum computer.

It is preparing for the world that arrives once someone else does.

About Dr. Ruth Wandhöfer

Adviser | Author | Speaker | Board Director | Professor

Dr. Ruth is a leading authority at the crossroads of finance, technology, cybersecurity, and regulation.

A former senior Citi executive, Ruth combines roles as an independent Non-Executive Director, Head of European Markets at Blackwired Cybersecurity, Author, Adviser, and Investor.

She also runs her own business, Leximar Advisory, which supports financial institutions, tech, and fintech/cyber security businesses. She is a global keynote speaker, strategist, and Visiting Professor at Bayes Business School.