Initiatives to Remedy the UK’s Deficit in Tech Skills and Knowledge as Quantum Computing Looms Large Over Financial Services

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By Tracy Vegro OBE, CEO, Chartered Institute for Securities & Investment (CISI)

What comes next after artificial intelligence (AI)? After years of significant growth throughout the financial realm, particularly in investment banking and capital markets, this not-new but immensely powerful set of technologies has had a breakthrough within the last two years. But what of the future? Some are looking towards quantum computing. 2025 has just been declared the International Year of Quantum by the United Nations (UN)—quantum mechanics first surfaced in 1925, thus the centennial celebration. Are financial institutions ready for another tech surge—one that’s been a century in the baking?

Research from Public First, commissioned by Microsoft and published in May 2024, stated that AI could contribute £550 billion to the UK economy over the next 10 years. A report from Tech Nation, published at the same time, valued the UK’s AI sector at £72 billion, greater than any other country in Europe. Knowledge and skills, though, create a tight bottleneck, one that the Chartered Institute for Securities & Investment (CISI), with major partners, has been working hard to loosen. This work is vital across our sector and amongst the professionals who advise us, such as accountants, consultants and lawyers, if we are to build the skills needed to support this valuation and the anticipated growth.

The Public First report commissioned by Microsoft focused on the United Kingdom, our home territory, but as an international organisation, we find that many of its conclusions, particularly regarding skills, are echoed around our world. To maintain the momentum of AI adoption here in the UK, we will need to take action on three key bottlenecks.

Bottleneck 1: Infrastructure. The UK’s digital-technology infrastructure is less advanced than those of many other countries. As of 2022, the UK had just over one percent of global computing capacity. Staying at the forefront of the fast-changing AI market will require substantial resources and capabilities, including adequate data-centre infrastructure, a dependable supply of powerful GPU (graphics processing unit) computer chips and building a greater understanding of the potential of quantum computing.

Bottleneck 2: Commercial awareness. The Microsoft report found that almost one-third (31 percent) of SMEs (small and medium-sized enterprises) across the commercial spectrum had yet to adopt the cloud, and almost half (47 percent) did not use AI tools, applications, robotics or machinery. To harness AI’s potential, businesses will need to become more familiar with digital technology.

Bottleneck 3: Skills shortage. Two-fifths of businesses struggle to find staff with good digital skills, according to the research, with shortages in traditional digital roles such as data analytics and IT (information technology). In addition, the need for professionals with new AI-specific skills, such as prompt engineering, is likely to rise. It will be essential to offer retraining and upskilling opportunities in AI-related fields over the next decade.

The CISI has been working hard this past year on the skills-and-knowledge issue alongside the Lord Mayor of the City of London, Alderman Michael Mainelli, who happens to be one of our most senior CISI Fellows. He has created an “ethical AI initiative” led by the CISI and the British Computer Society (BCS) with a steering group from the Worshipful Company of Information Technologists (WCIT), bringing the project to the hearts of the senior echelons of the City of London and thus the global financial world.

The courses that are part of this initiative, first launched by the CISI in November 2023, are now being taken by professionals in more than 400 organisations in 55 countries, working across the range of financial services—some 6,000 present and future leaders in total and multiplying quickly.

Alongside the educational developments comes important progress in the governance field. A pro bono initiative by the Lord Mayor and the WCIT, assisted by major investors and experts amongst our membership and beyond, has resulted in an exposure draft on responsible AI for investors, launched at the International Corporate Governance Network’s (ICGN’s) global conference in July 2024 to notable acclaim. It now involves firms with assets totalling more than $20 trillion, a significant proportion of total global assets under management (AUM).

The objective of this exercise by the WCIT’s Nicholas Beale, chair of the overall steering group, is to develop a straightforward two-page consensus to help investors and investees coordinate around the responsible deployment of AI, thus increasing returns and reducing risks. Although this consensus is written mainly from investors’ perspectives and is driven by them, the team is also consulting investees, because the consensus must be deliverable and mutually beneficial.

“There is a growing need for improved coordination,” Mr. Beale stated. Although there is wide general support for responsibility in AI deployment, in some cases, even high-level questions of what investors can reasonably expect are strongly contested. Meeting investors’ reasonable expectations over time will require significant investments in technological improvements and robust management frameworks, combined with governance structures and risk mitigation. A clear and visible shared consensus will accelerate such investments and enhance their returns. In addition, the widespread deployment of relatively undiversified sets of AI systems creates systemic risks for investors. Without a consensus on responsible AI, investee companies have few incentives to mitigate those risks.

Mr. Beale pointed out that “investors need further work and systems to understand, assess and mitigate AI-related systemic risks. A large, complex business ecosystem is subject to systemic risks as well as risks to individual firms, and systemic risks (which are generally much more serious for society and investors) need a different approach than considering the individual risks to firms. In addition, AI-specific risks need to be considered, such as transparency, bias and explainability.”

He explained that the way in which industries such as financial services, pharmaceuticals and airlines have established regulatory reporting and supervisory systems that “learn” from experiences and rare events can encourage analogous systems in AI-related industries. “To ensure and address risk management and compliance mitigation associated with AI-related systems, a robust governance and compliance framework needs to be established, especially in highly regulated industries. As AI is a fast-evolving technology, the framework needs to be agile, including regular review and adaptation cycles.”

The world of quantum is evolving in parallel at unprecedented rates. Karina Robinson—another CISI Fellow and, alongside the Lord Mayor, a member of our band of Apex Innovators (a set of “AIs” who drive through change and growth in financial services faster than most)—has been at the forefront of bringing quantum consciousness to the upper financial echelons. “Financiers do not need to be experts in quantum technologies. But a degree of familiarity is an essential requirement to remain ahead of the pack as we head into the Year of Quantum,” she explained.

“Quantum physics is the underlying science behind a host of different applications that will affect the world of finance, to larger or smaller degrees, from creating unbreakable encryption to helping predict financial crises, from optimising portfolio creation to forex trading, and other yet unimagined possibilities,” she continued. “Financial institutions will be among the first to benefit because, in finance, there are so many complex problems that need to be resolved in real-time.

“The last two years have been dominated by generative AI. It burst onto the scene with the arrival of ChatGPT in November 2022, after many years of conventional wisdom dismissing its imminence. This is not unlike quantum, where the focus on the development of quantum hardware capable of solving real problems—according to experts, likely in 2030 or thereabouts—has taken attention away from exciting nearer-term developments.” These include quantum software, which can be run on existing classical computers, as well as the incorporation of quantum into AI.

Ms. Robinson created the City Quantum & AI Summit in the City of London specifically to help financial leaders become familiar with this groundbreaking technology. Its slogan is “No lingo, no jargon, plain English only”, and it develops ways to incorporate these technologies into financial firms’ operations and investment strategies. Private-equity firms, asset managers and venture capitalists need to assess the opportunities arising from quantum technologies, which range from developing groundbreaking sensors to solving environmental challenges to optimising power grids that are coping with the complications of renewable-energy inputs to accelerating drug discoveries for more personalised medicines.

The CISI has been proud to support this initiative as it has grown over the past decade. This year’s event will be held as ever at the Mansion House, the home of the Lord Mayor and the nerve centre of his operations, on October 7, 2024.