Quantum computing: the next leap in finance?

Authors: Aya Pariy and Dr. Del Rajan

Quantum computing is often described as the next major leap in computing, but what does that mean in practice? 

At its core, quantum computing is a new type of computing that uses the principles of quantum physics to process information in fundamentally different ways from today’s classical computers.  

Traditional computers work with bits that are 0 or 1. Quantum computers, by contrast, use “quantum bits” (qubits), which can exist in multiple states at the same time. This allows quantum computers to explore many possible solutions simultaneously, rather than step-by-step. While this may sound abstract, the implication is simple: for certain types of complex problems, quantum computers could be exponentially more powerful than anything we use today. 

For investors and the financial services industry, this matters. Quantum computing has the capability to solve some of the most complex challenges in finance. These include: 

• Trading applications such optimising execution 
• Portfolio optimisation across thousands of variables 
• Risk modelling under extreme uncertainty 
• Pricing complex derivatives 
• Analysing vast datasets for patterns that are difficult to detect with current tools  

Over time, quantum computing could significantly enhance decision making, speed, and precision across investment processes. 

At the same time, the technology introduces important risks, most notably in cybersecurity. Many of today’s encryption methods, which underpin everything from banking systems to market infrastructure, could eventually be broken by sufficiently advanced quantum machines. This is why financial institutions are already investing in quantum defence technologies and preparing for a transition to new cryptographic standards such as post-quantum cryptography. 

Although we are still in the early stages of development, quantum computing is moving quickly from theory to real-world experimentation. For asset managers, asset owners, and the broader financial ecosystem, the key question is no longer if this technology will have an impact but when, and how to get ready. 

On 14 April, CFA UK is hosting an event on quantum computing that features Dr. Del Rajan, Vice President of Quantum Technologies at HSBC holds a PhD in quantum computing and is known for designing the world’s first quantum blockchain. At HSBC, he leads major quantum initiatives across the bank, including the first real financial trading application of quantum computing with IBM, as well as completed projects in post-quantum cryptography and quantum-secure communications. 

Del specialises in helping industry leaders understand what quantum computing is, how it differs from and complements AI, and why the rapid rise of quantum poses a major cryptographic and operational challenge for the financial sector. 

Del, which pathways led you to the world of quantum computing and then to the financial services industry? 

I have always been passionate about quantum physics, which I studied as an undergraduate. Following a period in the computer software industry, I returned to academia for a PhD in quantum computing which merged these two areas. 

HSBC was one of the first financial institutions that decided to explore how quantum computing could impact financial services. I was fortunate enough to be selected as part of the initial team. It has been exciting journey in innovation ever since!  
 
In one sentence: what is quantum computing and should the finance industry care?  

Quantum computing is a new computing hardware that directly harnesses the science of quantum physics, enabling the creation of powerful software that has the potential to revolutionize the financial industry. 

What’s the single biggest quantum-related risk or opportunity that investors should be aware/excited about right now? 

The single biggest quantum risk is to do with cybersecurity. As quantum computing hardware matures, sufficiently powerful systems will possess the capability to compromise widely used cryptographic standards, such as RSA. This emerging risk is one of the reasons that financial institutions such as HSBC have also developed a quantum defence program.  

One of the most compelling use cases for quantum computing is its application to financial markets. I recently led a project where we designed and developed the first application of quantum computing to algorithmic trading. We leveraged quantum computing hardware to enhance machine learning models, specifically improving the accuracy of fill probability calculations for trade orders. 

If you could describe your job using only a metaphor, what would it be? 

I would describe my role as an explorer. The most rewarding aspect of my job is operating at the frontier of quantum technology and its applications to the real world.