What are the primary barriers to large-scale adoption of quantum technology in financial services?

Barriers include the current immaturity of quantum hardware, scarcity of skilled quantum talent, unclear timelines for commercial applications, and challenges in aligning quantum R&D with business goals. To overcome these, firms need to strategically invest in talent, collaborate across ecosystems, and prioritize the most impactful use cases with realistic expectations.

How does quantum technology compare with other emerging technologies like AI or blockchain in financial services?

Quantum computing can solve certain types of problems – especially complex simulations and optimization tasks – that classical computes struggle do to as quickly, or at all. Artificial Intelligence (AI) excels in pattern recognition and data-driven insights. Blockchain, on the other hand, is mainly used to address distributed trust and transaction integrity. Using these technologies together could be powerful, but doing so effectively – and with true synergy – takes careful strategic planning.

What’s the expected Return on Investment (ROI) timeline for quantum technology initiatives in finance?

At the moment, ROI timelines are uncertain because of how new the technology is. Short-term value is mainly in quantum-safe security and early-stage innovation through POCs. Long-term financial gains depend on how mature the hardware is, as well as successfully deploying quantum-accelerated applications. Companies must be proactive but patient, so they’re ready to capitalize when breakthroughs occur.

How can organizations ensure compliance with evolving regulations related to quantum security?

Proactively engaging with regulators and standards bodies is key. Establishing PQC roadmaps that are aligned with emerging guidelines, conducting regular compliance audits, and participating in industry consortia will help firms stay ahead of regulatory requirements and show due diligence.

What competitive advantages can early quantum adopters in financial services expect?

Early adopters can build unique capabilities in advanced risk modeling, faster fraud detection, and superior product offerings. They’re also on the front foot when it comes to talent acquisition, influencing quantum research agendas, and reducing risks from cyber threats by implementing quantum-safe solutions sooner. These advantages can translate to improved financial resilience and market differentiation.

How should financial institutions prepare their infrastructure for quantum technology integration?

Institutions should start by identifying high-compute workloads, modernizing their IT infrastructure for integration with quantum platforms, ensuring flexible and scalable environments, and investing in hybrid classical-quantum workflows. They’ll also need to upgrade their security architectures to support PQC algorithms, and establish continuous monitoring frameworks to mitigate emerging quantum threats.

Quantum Technology Impact on Financial Services

Quantum technology will bring a paradigm shift to financial services (FS) through exponential computational capabilities. It’ll inform new approaches to risk management, security, and product innovation. While quantum computing is still in its early stages and commercial applications are still emerging, leading financial institutions are actively preparing for its transformative potential today.

Understanding quantum technology for financial services

FS organizations operate in a highly complex, fast-evolving ecosystem fraught with ongoing and emerging risks – from market volatility to cybersecurity threats and climate-related impacts.

So, what’s appealing about quantum technology? In short, its advanced capability means it can simulate and solve complex challenges faster than traditional computers, including:

Simulating financial market behavior more accurately.

Accelerating computations in areas like risk modeling, derivative pricing, and fraud detection.

Improving security posture through quantum-safe encryption methods.

Enabling new forms of secure communication and synchronization.

Even though quantum computing isn’t mature enough for widespread production just yet, early moves in research, investment, and experimentation are key to helping firms stay competitive and resilient in a changing cyber-threat landscape.

Opportunities for quantum technology in financial services

1. Banking and capital markets

Quantum technology opens up several compelling opportunities for innovation in banking and capital markets, including:

Risk management: quantum computers can handle complex, interconnected risk models more effectively, modeling scenarios that are computationally prohibitive today.

Fraud detection: quantum algorithms offer enhanced pattern recognition, which can help banks detect new types of fraud and financial crime more quickly and accurately.

Derivative pricing: pricing derivatives involves simulating multiple variables like interest rates, volatility, and asset correlations over time. Quantum simulation can make these calculations more accurate and efficient.
Quantum communication: Quantum Key Distribution (QKD) protocols could transform transaction security by providing tamper-proof encryption. Quantum internet advancements could also facilitate synchronized timing for transaction settlements and smart contracts.

2. Insurance and reinsurance

When it comes to insurance, quantum technology’s impact is focused on better risk quantification and product pricing:

Risk exposure modelling: insurers face challenges in modelling low-probability, high-impact catastrophic events – like natural disasters – where quantum simulations could improve accuracy.

Product pricing and underwriting: personalized insurance products need complex calculations, which quantum-powered algorithms could support with – helping insurers balance risk exposure with profitability.

Cybersecurity risks and opportunities: insurers face the dual challenge of protecting against quantum-enabled cyberattacks, while also potentially offering new insurance products related to quantum-safe technologies.

Realities and challenges: Beyond the quantum hype

Despite optimism about adopting quantum computing in FS, there are several practical hurdles to overcome:

Technology maturity: scalable quantum computers (hundreds of thousands of qubits) are years away.

Uncertain timelines: there’s no consensus on when quantum will be production-ready for specific use cases.

Research and Development (R&D) vs business disconnect: firms are at risk of investing in misaligned research that lacks business relevance.

Talent shortage: skilled quantum technologists are in short supply and high demand.

Organizations need to identify their most troublesome problems – those that classical computing can’t solve efficiently – and whether quantum acceleration could help tackle these challenges.

A balanced approach to quantum readiness in financial services

Firms can take deliberate steps now to prepare for quantum technology’s future impact. Capgemini recommends these three strategic actions:

1. Prepare for migration to Post-Quantum Cryptography (PQC)

Quantum computers will eventually be able to break many classical encryption methods, threatening critical financial data security.

Institutions are already vulnerable to “harvest now, decrypt later” attacks that target data with long shelf lives – like pensions or health records.

Proactive PQC adoption involves auditing current encryption, identifying sensitive areas, and developing clear migration strategies to quantum-safe encryption standards.

Firms must coordinate with regulators to set up effective compliance and maintain the integrity of the financial system.

2. Influence the direction of quantum research and innovation

Firms should invest in ongoing R&D and creating Proofs of Concept (POCs) that align with their strategic priorities.

They should prioritize their use cases based on the quantum advantage potential and expected business impact.

Actively participating in quantum ecosystems – including startups and academic partnerships – lets firms share the cost of R&D and access emerging talent.

Financial institutions must keep engaging with the topic of quantum technology, so they have the knowledge and ability to rapidly pivot as it matures.

3. Participate in quantum ecosystems and partnerships

Because quantum computing is still evolving, no single technology – like qubit modalities or hardware/software platforms – is dominant.

Joining collaborative ecosystems mitigates risk, pools expertise, and accelerates innovation.

Engaging trusted transformation partners can help interpret the technological landscape and develop realistic quantum roadmaps.

Quantum technology use cases in financial services

Area	Quantum application	Business impact
Risk management	Complex, interconnected simulations	Proactive risk mitigation and better stability
Fraud detection	Advanced pattern recognition algorithms	Early detection of sophisticated financial crime
Derivative pricing	Accurately simulating multiple variables	Reduced pricing errors and optimized hedging
Cybersecurity	PQC and QKD	Stronger data protection and futureproofed systems
Insurance risk modeling	Simulating the probabilities of catastrophic events	Improved pricing and capital resilience
Product pricing	Quantum-enabled personalization	Competitive, custom-fit offerings
Financial communications	Secure payments and synchronized settlement protocols	Faster, more secure, and compliant operations

Strategic considerations for financial services leaders

Start now to avoid future disadvantages: waiting to invest in or build quantum capabilities can place firms at a significant competitive disadvantage. Early adopters benefit from talent development, learnings from POCs, and strategic positioning.

Pursue regulatory compliance and partnership: regulators will play a central role in establishing standards around quantum security. Firms must proactively engage to shape their guidelines that secure the entire ecosystem.

Focus on quantum security first: the most immediate impact will come from protecting sensitive data and infrastructure from future quantum-enabled cyber threats through PQC implementations.

Adopt a portfolio approach: not all use cases will succeed. Organizations should prioritize based on strategic value and be flexible in scaling investments as technology matures.

Power ecosystem innovation: collaborate with quantum startups, academia, and technology partners to accelerate innovation and share risk.

Actionable next steps for financial institutions

Conduct a comprehensive audit of current cryptographic infrastructure and data sensitivity.

Develop a post-quantum cryptography migration roadmap that’s aligned with regulatory expectations.

Identify critical compute-intensive workflows for potential quantum use cases.

Invest in hiring and upskilling talent, with a focus on quantum computing and cryptography.

Pilot POC projects that target top-priority use cases tied to business objectives.

Engage with external quantum technology ecosystems and partner with trusted advisors.

Download our full report on the future of quantum technology in FS for detailed insights, use cases, risk assessments, and strategic recommendations for preparing your organization for a quantum-enabled future.

Unlock your competitive advantage and safeguard your business by starting your quantum journey today.

Download the report

FAQs on

Latest insights

Report

The future and impact of quantum technology in financial services