- Moody’s Analytics report found financial firms were under-invested in quantum computing, with 87% short on budget.
- The report shows that 56% of respondents see the emergence of quantum computing as a threat or an opportunity.
- 73% have yet to determine the real commercial advantage that quantum technology could bring.
Financial firms are underinvesting in quantum computing, according to a new report from Moody’s Analytics, even though more than half of respondents — who data, analytics and innovation leader in primary financial services and banking
company – a quantum view poses valid opportunities and threats.
“Quantum computing still needs more work to reduce financial institution budgets,” said Sergio Gago – Managing Director AI and Quantum Computing, Moody’s Analytics. “While we can see the claims about how many companies are investing in this, the truth is that most don’t even think about budgeting, mainly because they don’t realize what benefits there can be. This reveals that more effort must be put into education and preparation than short-term ROI expectations.”
In the report, analysts found that 87% of respondents do not have a budget for quantum and 73% cannot identify the current bottleneck that requires a quantum advantage.
While financial firms don’t have a quantum budget — and the report identified some skepticism about the quantum hype among its respondents — more than half see quantum as a potential boon to seize, or a possible threat to mitigate.
The report shows that 56% of respondents see the rise of quantum computing as a threat or opportunity, with 31% seeing it as a major opportunity and around 13% seeing quantum as a threat.
For analysts, this shows the need for companies to do due diligence for their future quantum strategy.
The report advises: “As such, financial companies should focus on research and experimentation to determine the commercial value of quantum computing and make informed investment decisions.”
The report also shows that 82% of respondents consider the immaturity of quantum technology to be the most significant operational challenge for developing quantum computing capabilities. Only 14% of respondents are actively developing quantum computing capabilities either internally or with external partners.
Respondents see the many ways quantum can help financial companies — but the report warns business leaders to tone down their expectations.
Five high potential use cases for quantum computing include: risk analysis (67%), stress testing (59%), cybersecurity (54%), synthetic data (49%), and for fraud detection and money laundering (34%) .
Quantum artificial intelligence and machine learning are of great interest to the financial services community, according to the report. Interestingly, while 88% of respondents reported machine learning and optimization as a problem category where
quantum technology could be present future opportunities, less than 10% have started coping with it.
Despite the interest — and the clear link between quantum’s inherent computing power and the financial industry’s unique computing challenges — analysts and respondents recommend business leaders exercise prudent expectation setting.
The report stated: “While quantum computing is promising significant transformation in the financial services industry, that is important to approach its potential with a conscious eye. Short-term applications such as machine learning and optimization offers the most immediate opportunity for industry to benefit from quantum computing.”
Post Quantum Preparation?
While “hack now, decrypt” is later often cited as the reason for placing post-quantum cybersecurity at the top of the list of quantum use cases, analysts find most organizations are not ready for quantum computing to break current encryption methods. However, respondents acknowledged the importance of dawn.
According to the report, 86% of financial companies are not ready for post-quantum cybersecurity, although 84% foresee a need in the next 2-5 years.
To conduct research, analysts use quantitative and qualitative approaches. Quantitative part of studies including a survey submitted 15 multiple-telephone-optional questionsassisted online survey of up to 200 data, analytics and innovation leader in the financial and banking services sector companies from 17 Europe and North American countries. All respondents come from the company with no less than $100 million USD in annual income. Participant title include: Chief Technology Officer, Head of Data Officer, Head of Data and Officers and Head of Analytics or Innovation Director. The results of this study are complete with analysis and comments from six industries experts with whom we perform in-depth phone interview.
Reports are available for download Here.