Quantum computing is becoming one of the most widely discussed emerging technologies in financial markets infrastructure. In industry commentary, the technology is often framed either as a revolutionary engine for trading performance or as an existential threat to the cryptographic systems that secure global finance. In practice however, the near-term impact is likely to be more subtle but no less significant.
Speaking during a keynote fireside chat titled “The Quantum Horizon and the Future of Trading Technology” at A-Team Group’s recent TradingTech Summit London, Joel Van Dyk, Global Chief Cybersecurity Architect and Managing Director at State Street, argued that the industry’s immediate priority should not be speculative breakthroughs in trading speed, but preparing the cryptographic and data infrastructure that underpins modern financial markets.While quantum computing could eventually reshape areas such as portfolio optimisation and complex risk modelling, its most immediate implications lie in cybersecurity, specifically the long-term resilience of the encryption systems used across global financial infrastructure.
For trading technologists, preparing for quantum computing is therefore less about deploying quantum hardware and more about strengthening operational disciplines that many institutions already struggle to maintain, particularly around data governance, cryptographic infrastructure and third-party risk management.
A Cybersecurity Challenge First
The central concern surrounding quantum computing is its potential to undermine widely used encryption algorithms.
Modern financial systems rely heavily on public-key cryptography to secure network communications, digital identities, transaction flows and regulatory records. These algorithms have proven resilient for decades, but many are theoretically vulnerable to future quantum computers capable of solving the mathematical problems on which they depend.
Although such systems are unlikely to become practical for several years, financial institutions cannot wait until that point before responding. Security teams are increasingly focused on the possibility that attackers may already be collecting encrypted data in anticipation of future decryption capabilities, a scenario known as “harvest now, decrypt later.”In this model, adversaries capture encrypted communications or data archives today and retain them until advances in computing allow the encryption to be broken. That possibility is pushing financial institutions to prepare for a transition toward post-quantum cryptography, a new class of encryption algorithms designed to resist attacks from quantum computers.
However, migrating cryptographic infrastructure across a large financial institution is far from straightforward. Encryption is deeply embedded across trading systems, messaging networks, identity services and application architectures. Preparing for quantum risk therefore begins with a much more fundamental challenge: identifying where cryptography is actually used.
The Hidden Complexity of Cryptographic Infrastructure
One of the largest operational challenges facing financial institutions is that cryptography is rarely centralised. Over decades of system development, acquisitions and platform upgrades, encryption has been implemented across thousands of applications, libraries and vendor products. In many cases, organisations lack a complete inventory of where cryptographic algorithms are embedded in their technology estate.
Before institutions can migrate to post-quantum algorithms, they must first locate every point where those algorithms are used. This requires scanning application code, mapping cryptographic dependencies and ensuring that encryption functions are abstracted into centrally managed libraries that can be replaced without rewriting entire systems.
This architectural capability – often referred to as cryptographic agility – is becoming a key objective for cybersecurity teams. Rather than relying on a single encryption standard for decades, institutions will need to develop the ability to rotate algorithms as new vulnerabilities or computational capabilities emerge.
For global financial organisations operating thousands of interconnected applications, achieving that level of agility represents a multi-year transformation programme.
Where Quantum May Deliver Advantage
Although security concerns dominate the near-term agenda, quantum computing could eventually prove advantageous in certain financial calculations. Quantum systems are particularly suited to solving complex optimisation problems that are computationally expensive for classical systems.
Examples include portfolio optimisation, derivatives pricing and large-scale risk modelling – calculations that involve evaluating enormous numbers of possible scenarios and constraints.
Early experiments suggest that hybrid quantum-classical approaches may accelerate certain types of optimisation and simulation problems. The potential advantage does not lie in faster trading execution – where classical low-latency infrastructure remains unmatched – but in enabling institutions to analyse complex portfolios and risk exposures more efficiently.
Even modest improvements in these calculations could translate into meaningful financial advantages for large institutions. For now, however, most banks remain firmly in the experimental phase.
Quantum Infrastructure Will Likely Remain in the Cloud
Another factor shaping industry strategy is the rapid evolution of quantum hardware itself.
Multiple competing architectures are currently under development, including superconducting processors, trapped-ion systems and neutral-atom platforms. Each offers different capabilities for particular types of calculations, and the long-term technological winner remains unclear. As a result, most financial institutions are reluctant to commit capital to their own quantum hardware.
Instead, experimentation is largely occurring through cloud-based quantum platforms, where firms can access quantum processors via quantum-as-a-service environments.
This model allows organisations to test algorithms and develop internal expertise while maintaining flexibility as hardware technologies evolve.
For the foreseeable future, the idea that quantum computers might operate within latency-sensitive exchange colocation environments remains unlikely.
Data Governance Takes Centre Stage
Perhaps the most immediate consequence of quantum risk is the renewed emphasis it places on data governance. Financial institutions have accumulated vast quantities of data over decades across fragmented systems and business units. Many organisations still lack a clear inventory of where sensitive information resides or how long it needs to be retained.
That lack of visibility becomes problematic when evaluating quantum risk.
Not all data requires the same level of protection. Some information – such as public disclosures or marketing content – has limited long-term sensitivity. Other categories, including client information, proprietary trading strategies and regulatory records, may need to remain confidential for many years.
Identifying and prioritising these high-value data assets is therefore a prerequisite for any credible quantum-readiness strategy. In some cases, the most effective response may not be re-encrypting historical data but reducing the volume of sensitive information that institutions retain unnecessarily.
Vendor Ecosystems Expand the Challenge
Preparing for post-quantum cryptography also extends beyond internal systems. Modern trading environments rely heavily on third-party technology providers, including trading platforms, cloud services, messaging networks and analytics systems. Many of these technologies contain embedded cryptographic components that financial institutions cannot directly control.
As a result, quantum readiness increasingly becomes part of broader third-party risk management programmes. Technology leaders should therefore engage vendors to understand how their products will transition to post-quantum encryption standards and whether underlying software dependencies could introduce hidden vulnerabilities.
Preparing for a Long Transition
Regulators are also beginning to engage more actively with financial institutions on quantum-related cyber risks. Supervisory authorities in multiple jurisdictions are encouraging banks to develop credible roadmaps for migrating to post-quantum cryptography over the coming decade.
From a trading technology perspective, the message is clear: while quantum computing itself may still be emerging, the operational groundwork required to prepare for it must begin now.
In many respects, the most immediate impact of quantum computing may not be technological at all. Instead, it lies in the discipline it forces institutions to adopt in managing their cryptographic infrastructure, data assets and technology supply chains.
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