This is an excerpt from a share on the topic of unleashing the power of quantum technology in the banking industry by Mr. Phillip Wright – Senior Director, Banking Division, HSBC Vietnam.
Mr. Phillip Wright – Senior Director, Banking Division, HSBC Vietnam
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In an era of unprecedented technological breakthroughs, the world is on the cusp of a true revolution. For instance, Firesat, an AI tool developed by Google, can detect forest fire signs the size of a classroom, updating high-resolution images every 20 minutes. Or, in healthcare, where AI systems, from robotic surgery to advanced diagnostic tools, are poised to transform how medical services are delivered. AI is no longer a futuristic concept; it is genuinely reshaping various aspects of today’s life.
As technology advances, quantum computers, once a concept confined to science fiction, are becoming a tangible reality. For the financial industry, quantum technology promises to be a pioneering force, fundamentally transforming global banking operations.
A Brief Overview of Quantum Computers
Quantum computers harness the power of qubits. Unlike classical bits that represent either 0 or 1, qubits can represent both simultaneously due to the principle of “quantum superposition.” This capability allows quantum computers to process vast amounts of data in parallel, solving problems far quicker than traditional systems.
Another crucial principle is “quantum entanglement,” which enables qubits to connect uniquely, where the state of one qubit directly influences another, regardless of their physical distance. This interconnection opens doors to more complex and creative computing models, resulting in unprecedented problem-solving capabilities.
How Quantum Technology Will Transform Banking
The applications of quantum computing in finance are diverse. According to McKinsey, this technology could unlock a potential $700 billion for the global banking industry by 2035.
One immediate impact is on risk assessment and decision-making. Banks rely on complex models for credit evaluation, investment, and portfolio management, which demand substantial time and computational resources. Quantum computers enable real-time simulation and optimization of variables, aiding in informed decision-making and improved outcomes. Pilot programs on portfolio management and derivatives pricing are already underway.
Cybersecurity is another critical domain where quantum technology can have a profound impact. As cyber-attacks become increasingly sophisticated, traditional encryption methods will become obsolete. To stay ahead, organizations are investing in advanced technologies like Quantum Key Distribution (QKD) – a quantum mechanics-based method for secure information exchange. HSBC, for instance, has joined a secure network developed by BT and Toshiba, connecting its global headquarters with the bank’s data centers via QKD, showcasing the tangible impact of quantum technologies in banking.
The quality of surveillance and fraud detection will also witness a significant leap forward due to quantum advancements. By rapidly analyzing millions of transactions, quantum computers can more effectively identify anomalies and suspicious patterns, enhancing security against identity theft, money laundering, and financial fraud.
Additionally, quantum technology holds the potential to enhance customer experiences in banking. From optimizing loan terms to improving high-frequency trading strategies and AI-powered customer service, this technology can significantly boost the speed, accuracy, and efficiency of financial services. Some leading organizations are already venturing into this domain.
Quantum Risks: Prepare Now
Alongside the vast potential of quantum computers come significant risks, especially for data-sensitive industries like banking and healthcare. As technology advances, the need to prepare for potential disruptive changes becomes more urgent.
One immediate concern is the vulnerability of current encryption systems. While the exact timeline is uncertain, experts estimate that a large-scale quantum computer could render widely used cryptographic standards ineffective within the next decade, with probabilities ranging from 19-34%. Some even predict this could happen within the next five years. Sitting idle and waiting for these risks to materialize is not a prudent strategy; instead, proactive risk mitigation should start now.
Another risk is the “harvest now, decrypt later” attack vector. This technique, highlighted by the G7 Cyber Expert Group, involves malicious actors collecting encrypted data today with the intent to decrypt it in the future using quantum computers. Therefore, any information with long-term “shelf life,” such as personal financial data, strategic transactions, or corporate intellectual property, needs protection now to safeguard against future attacks.
Transitioning to quantum-safe security is not a quick fix but a multi-year journey involving identifying vulnerable systems, implementing post-quantum encryption algorithms, adopting agile encryption, and deploying quantum security technologies like QKD.
For large global organizations, this also entails navigating a dynamic landscape of legal and cryptographic standards worldwide.
The Future of Quantum in Finance
While quantum computing is still in its infancy, its potential to reshape the financial landscape is undeniable. Organizations that take action now, whether through research investments, strategic partnerships, or pilot projects, will be poised to lead this transformative journey. It’s not just about innovation but also readiness. In a rapidly evolving technological landscape, adaptability will determine who emerges as a pioneer in the new era of banking.
Unlocking the ‘New Goldmine’: Banks’ Astonishingly Swift Disbursement Processes
“The vast majority of small and micro-businesses, a staggering 97%, were once unable to access credit without collateral. However, through the power of data, which has become a ‘goldmine’, banks have revolutionized the lending landscape. By effectively mining and leveraging this data, banks now consider it as good as a physical asset for collateral, opening up a world of opportunities for these businesses to secure loans.”
Streamlining VietinBank’s Network for Smarter Transactions
Deep digitization of products and services, redesigning business processes, trimming the traditional transaction network, and harnessing the power of data – these are the key focus areas that VietinBank has, is, and will be undertaking to accelerate comprehensive digital transformation.
Digital Financial Solutions: OCB’s Revolutionary Approach at the 2025 Banking Industry Digital Transformation Event
“Orient Commercial Joint Stock Bank (HOSE: OCB) showcased an array of superior digital products at the ‘Banking Digital Transformation 2025’ event, crafting a comprehensive financial ecosystem.
“MB Bank’s Vice President Showcases the Talents of an Unsung Hero Team: The Elite Squad of ‘Ethical Hackers’ Protecting Over 30 Million Customers, Even Tricking Senior Leaders in the Process.”
“Mr. Vu Thanh Trung, MB, forgoes the traditional requirements of formal qualifications. Instead, he seeks individuals with proven practical abilities and a keen imagination to identify loopholes within the banking system and its customers.”
Merging Three Provinces: A Golden Opportunity for Vietnam’s Economic Growth
“The merger of Lam Dong, Binh Thuan, and Dak Nong provinces presents a golden opportunity to create a new, large-scale growth pole with strong momentum. This new entity has the potential to spearhead a green development trend for the entire Central – Highlands region,” emphasized Mr. Dinh Van Tuan, Vice Chairman of Lam Dong Provincial People’s Committee.
