From AI to quantum — can Singapore lead the next era of financial innovation?

Just as it has in digital banking and cross-border payments, the Republic now has the opportunity to lead in quantum-powered finance. By Tancy Tan

- By Tancy Tan

Artificial intelligence (AI) is already reshaping financial services from real-time fraud detection to precision-led customer insights. But the next leap forward will come not from AI alone, but from its convergence with quantum computing, a transformation that could redefine how we model risk, secure trust, and deliver innovation within the industry.

Quantum computing uses rules of quantum physics to manipulate information in new ways, enabling it to solve certain problems that are out of reach of even the most powerful classical computers.

This opens new frontiers in optimization, simulation, and machine learning, areas where finance, by nature, demands speed and precision. For example, quantum computing has the potential to accelerate specific components of financial systems, such as risk modeling, optimization engines, and derivative pricing, where traditional methods struggle with combinatorial complexity.

But this transformation brings both opportunity and urgency. The same power that unlocks new use cases also threatens to render today's encryption standards, like RSA, for example, obsolete.

And while large-scale quantum computers are not yet commercially available, the risk of "harvest now, decrypt later" tactics—where attackers steal encrypted data now in anticipation of using quantum computers to decrypt the information when the technology matures—means data exchanged today may be compromised in the future. This dual promise, and peril, demands preparation.

SINGAPORE: FROM READINESS TO LEADERSHIP Singapore is one of the few countries not just anticipating this shift, but actively shaping it.

Announced in June 2024, the Republic's National Quantum Strategy, backed by nearly S$300 million from the National Research Foundation, aims to solidify the country's status as a quantum technology hub over the next five years.