How Arqit’s Technology Will Revolutionise The Financial Services Industry

Technology has transformed how people go about their day-to-day lives, in all kinds of sectors, and the financial services industry has changed dramatically in recent years. With the rise of quantum technology set to revolutionise the world yet again, the financial services look to be in for another shake-up in the near future.

How the financial services industry uses technology

Despite the benefits of technology, the financial services have long been considered to be behind the times. It’s often been slow to take up new innovations or technologies. Concerns about security have meant that traditional banks and other companies have struggled to meet the changing needs of their customers, and opted to stick with the outdated technologies that they’ve already been using for years. In recent years, as the world has become more connected, it’s become easier than ever for customers to change the services they use with the swipe of a finger or the press of a button - meaning that financial companies have been forced to adapt to keep up with the times.

How it’s starting to change

From banks and insurance companies to fintech startups and trading platforms, there are plenty of different kinds of companies in the financial services sector, and all have had to adapt by moving many of their services online. Many companies have migrated their data to the cloud rather than use traditional data centres or running their own servers, which frees up more time and resources for their customers. Other companies have also invested in mobile apps, making it quicker and easier for customers to access their data as well as their money without having to visit a bank.

Artificial intelligence, or AI is already being used by these companies, and as more developments are made in this technology, more and more people are set to start using it. The consultancy firm McKinsey & Company already estimates that AI could generate an additional $1 trillion for the banking industry every year. It can be used in machine learning, modelling data and offering customers safer and smarter ways of investing their money, or by using algorithms to spot trends in the market.

The benefits of quantum technology

The financial industry has been using models and computer algorithms for years in order to evaluate risks and make predictions. This isn’t completely without risks, though - these calculations take time, and have plenty of variables that can easily be missed. Today’s computers aren’t powerful enough to do everything that they’re needed to. Recent advances in quantum technology, however, have led to the development of quantum computers, which are faster and have more processing power than traditional computers - last year, Chinese researchers unveiled the Zuchongchi 2.1, which is 10 million times faster than the world’s most powerful quantum computer.

With more financial transactions taking place online, and companies moving to the cloud, this has meant hackers are more of a threat than ever. It’s become more important to keep our data safe from cyber attacks. As technology has improved, so have criminals - they’ve become better at decrypting passwords and accessing sensitive information. Since quantum computers are more powerful than normal computers, they’ll also be able to work out passwords far quicker, undermining the encryption methods that are used by people all over the world.

How QuantumCloud is helping

Some firms, such as the British start-up Arqit, are already working hard to prepare for the post-quantum future, and develop methods that are resistant to hacking from quantum computers. Its solution is QuantumCloud™, which uses state-of-the-art technology to create encryption keys. The quantum method of this encryption, which uses particles of light, means that it’s secure against other forms of hacking, including attempts from quantum computers. If someone tries to access the data, or listen in on communications, then that would change the state of the encryption key, leaving it unreadable or unintelligible to the hacker.

At the moment, many of the advantages and dangers of quantum computers are purely theoretical, because they aren’t readily available yet. They’re mainly used by companies like Microsoft, Google, and IBM, or the researchers creating them. However, powerful quantum computers are being created every few months, and it’s surely only a matter of time before this technology falls into the wrong hands and makes other encryption methods obsolete.

Considering the amount of money in the financial services industry, it’s more vulnerable than other sectors to the quantum threat. Work needs to be done to safeguard consumers’ and corporations’ financial information, and even though the threat is coming from quantum technology, it may be the only way to keep our data and our communications secure.