The European Union is placing a billion-euro bet on quantum computing. The goal: reshape industries from drug development to national defence – and, eventually, financial services. Banks and asset managers should pay attention now, not later.
For decades, computing performance followed Moore’s Law – the observation that the number of transistors on a microchip doubles approximately every two years. That trend delivered exponential growth in processing power and underpinned the digital revolution. But it’s faltering. As chips approach atomic scale, gains have slowed, and the economics of continued miniaturisation no longer hold. The model that powered half a century of computing progress is reaching its limit.
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Enter quantum.
Quantum computing represents a fundamentally different approach. Classical computers process data using bits — either 0 or 1. Quantum computers use qubits, which can exist in multiple states simultaneously thanks to quantum mechanical phenomena like superposition and entanglement. This allows them to evaluate countless possibilities at once. It’s technology right at the edge of science fiction, the type of advancement that may reshape how we understand the universe.
The field has long existed in theory. Paul Benioff described a quantum mechanical model of a computer in the early 1980s. But progress was slow, and quantum remained a laboratory curiosity. That has changed.
Europe looks to lead in a crowded market
In 2024, Amazon unveiled “Ocelot,” its latest quantum chip. IBM and Google are developing increasingly stable machines. China has committed billions to quantum R&D. And now, the European Union is playing catch-up with a long-term, industrial-scale investment.
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By GlobalDataThe European Union created Quantum Flagship, which is a central repository for quantum projects, uniting both national and regional projects. It describes itself as one of the most “ambitious long-term research and innovation initiatives of the European Commission”. This includes €1bn in European Union funds, including hundreds of millions of Euros for the last three years, specifically on quantum computers.
The new Quantum Europe Strategy, published in July, lays out the next phase. It focuses on five areas: research excellence, infrastructure investment, a strengthened startup ecosystem, dual-use applications, and workforce development. The ambition is clear: turn Europe’s deep scientific bench into a globally competitive industrial base.
The challenge is commercialisation. The EU leads in quantum talent and academic research output, and nearly a third of the world’s quantum startups are based in Europe. But it lags on patents and market share. Fragmented funding, limited industrial demand, and weak public procurement coordination have slowed deployment. The Commission acknowledges this shortfall — and aims to fix it.
That includes major moves on infrastructure. Through the EuroHPC Joint Undertaking, Europe is already deploying its first generation of hybrid quantum-classical computing systems. Pilot production lines for quantum chips will launch in 2025, backed by €40m–€50m each. A full Quantum Chips Industrialisation Roadmap is due in 2026, alongside new EU-wide testbeds, secure communication networks, and a Quantum Internet pilot facility.
What this means for banks
One of the industries singled out for early adoption: financial services. Quantum computing is particularly suited to problems involving complex optimisation, high-dimensional simulations, or enormous amounts of data. In practice, that means risk modelling, portfolio optimisation, credit scoring, fraud detection, and capital planning — all central to banking, asset management, and insurance.
Quantum simulations could allow risk teams to test thousands of market scenarios before the trading day even begins. Hedge funds could use quantum-enhanced models to uncover patterns in noisy, sparse data. Regulators could stress-test financial networks with greater speed and precision. Banks could deliver more personalised financial products by simulating customer behaviour at much greater granularity. Insurance firms can utilise its benefits across risk analysis, fraud detection and policy design.
For a retail audience, consider the following applications:
- Fraud detection: As fraud patterns become more sophisticated, quantum-enhanced machine learning could detect subtle, non-linear anomalies across massive transaction volumes. This could reduce false positives and accelerate alerts, especially in real-time payments environments.
- Credit scoring: Quantum algorithms could improve modelling for thin-file or underserved borrowers by analysing non-traditional data and complex behavioural indicators helping banks expand responsible lending to new customer segments.
- KYC and onboarding: In future, quantum search capabilities could enhance identity verification by accelerating checks against encrypted datasets, especially when combined with advances in post-quantum cryptography. This could improve both compliance and customer experience.
Some of these benefits are already being prototyped on hybrid platforms, where quantum machines act as accelerators for specific tasks alongside classical high-performance systems. And because much of the work funded through Quantum Flagship and EuroHPC is open source, financial institutions can monitor progress and identify early partners.
But caution is warranted. The so-called “quantum advantage” – the point at which a quantum system outperforms the best classical alternative for a real-world problem – hasn’t yet arrived. No one knows precisely when it will. Some people have been saying it’s imminent for more than 20 years. This makes timing the market risky.
How to engage without going all in
The smarter move is selective engagement. That means assigning someone a person or team of senior expertise – with a background in data science, strategy, or innovation – to track financially relevant quantum developments and build relationships with research labs, start-ups, or platform providers working on optimisation, simulation, or machine learning. Many are actively seeking co-development partners with access to real-world datasets and domain expertise.
Forward-thinking firms are already experimenting with quantum algorithms through cloud-based quantum services and emulators. These early tests focus on evaluating quantum computing’s potential for risk management applications.
The EU’s approach also creates opportunities for participation. Public testbeds and pilot systems are intended to be accessible, especially for SMEs and enterprises outside the core quantum research community. For firms looking to get closer to the edge of development, it’s also worth attending quantum-focused industry conferences, technical forums, or EU-hosted consultations. Many early-stage results are presented well before commercial packaging.
Quantum computing will not remake the financial industry overnight. But it will arrive in waves: through proofs of concept, niche applications, hybrid integrations. And when a decisive leap happens, it will reward the firms that prepared early – not those that waited for a polished product launch.
David Sewell is CTO, Synechron
