What is quantum computing?

Developments in quantum computing are edging the technology ever closer to real world, industrial application. So what is quantum computing exactly, and how might it be applied to financial services?

The journey to quantum theory

The history of physics can be characterised by successive scientific revolutions that deepen humanity’s understanding of nature; probing smaller and smaller distances.

In the late 17^th century, when scientists had begun to home in on a reliable, objective method – of observation; hypothesis formation; experimentation; and theory proposition – Isaac Newton started thinking about the mechanics of gravity, having watched an apple drop from a tree. The equations he subsequently wrote to describe the motion of celestial bodies are still used, to impressive accuracy, today.

Gravitational law remained almost untouched until the early 1900s, when Albert Einstein published two groundbreaking papers: The General and Special Theory of Relativity. These works explained the true relationship between space, time and mass – proving that time is relative and that gravity is an effect of the geometry of spacetime. These theories still guide the study of large objects and planets.

Interest in the smallest scales only really started taking off after 1910, with the emergence of quantum physics – a field of physics focused on the nature of subatomic particles, or ‘quanta’. This scientific revolution grew over a number of decades, thanks to the contributions of numerous scientists.

Perhaps the most culturally famous figure of quantum physics is Erwin Schrödinger, who in 1926 introduced wave mechanics – proposing that, until observed, subatomic particles such as photons can be both waves and points in space, simultaneously. This he called the ‘superposition’ of matter; a state immortalised by the cat-in-the-box analogy – which argues that a cat trapped inside a box armed with poison gas (and a temperamental detonator) should be considered both alive and dead at the same time.

The death of ‘bits’?

The potential of particles – or information – to exist not just in binary states, but in superpositions of both, has radical implications for computer technology. This is because the language of all machines (until recently) relies on a numbering system – comprising only the digits 0 and 1, known as ‘bits’ – to represent data. Ultimately, this limits computational power.

Quantum physics, however, promises to exponentially increase computational power through quantum bits, or ‘qbits’, which can represent a combination of 0 and 1 at the same time. This enables quantum computers to solve problems that are too complex for classical computers, at breathtaking speed.

Applications in financial services

Though quantum computing is still in its infancy, it will not be long until it matures – perhaps reaching an inflection point before 2030. Indeed, JP Morgan is leading the arms race in this field, accounting for two-thirds of all quantum job postings among a group of 50 major banks tracked by Evident. The bank has also published more than half of all quantum-related research papers and is already seeing value from quantum-inspired algorithms in portfolio optimisation and cybersecurity.

But the potential applications of quantum computing within financial services extend far beyond these two examples. There is potential for retail banks to enhance the precision of credit-decision algorithms and tighten collateral optimisation; for payments service providers (PSPs) to supercharge transaction security and speed; for large institutions to revolutionise back-office operations; and much, much more.

Yet, in order to deliver on these promises there are two main hurdles that must be cleared:

1. Producing the requisite materials to build a functional quantum computer, and
2. Realising so-called 'Certified Quantum Randomness'

Regarding the materials, imperfections in existing silicone chips have meant that today’s quantum computers can maintain coherence (in other words, operation) for only a fraction of a second. This has for some time relegated the quantum computer to the field of theory, not practice.  

Certified Quantum Randomness, meanwhile – a process for generating random numbers that are not only unpredictable but can be mathematically verified as such – is central to a quantum computer’s security. Traditional random number generators in classical computers are based on hardware assumptions and can therefore be compromised. It is vital that quantum computers use quantum phenomena like entanglement to create randomness that is difficult for even sophisticated adversaries to predict or manipulate.

Recently, these two hurdles have been significantly lowered. The first challenge was addressed in May 2024, when researchers from the University of Melbourne devised a breakthrough method for creating ultra-pure silicon. This sustained the quantum computer’s coherence for much longer; paving the way to a scalable product. In March 2025, Certified Quantum Randomness was realised, when JPMorgan Chase – in collaboration with researchers from Quantinuum, Argonne National Laboratory, Oak Ridge National Laboratory, and the University of Texas at Austin – executed the first ever successful demonstration of a novel quantum computing protocol to generate randomness. The bank’s head of global technology labelled the breakthrough a “major milestone in quantum computing [which] will be vital to further research, statistical sampling, numerical simulations and cryptography.”

What’s next?

Though the materials, the technologies, and hundreds of years of scientific research are behind the full-scale roll-out of quantum computing, more time – and considerable investment – is needed. Qbits remain incredibly sensitive to environmental interference and must be kept at extremely low temperatures to remain coherent. Specialised infrastructures and cryogenic cooling systems are energy-intensive and costly to run. The systems’ susceptibility to noise also makes them tricky to scale and mass-produce; robust error correction techniques will be needed mitigate any calculation errors introduced by noise.

Fortunately, solutions to these problems may not be far off. If fears around the geopolitical advantages of quantum computing can be lanced – and research and international collaboration becomes commonplace – the entire financial services ecosystem and its customers stand to benefit.