Quantum Computing Risks for Asset Owners: Cybersecurity, Governance And Competition

Insider BriefQuantum computing is emerging as a governance issue for institutional investors long before it becomes a mainstream investing tool.In an article published in Institutional Investor, Angelo Calvello writes that asset owners risk repeating the mistakes many made during the rise of artificial intelligence by focusing on whether quantum computing is overhyped while failing to address operational risks and long-term competitive implications that already require attention.Calvello reports that the debate around quantum computing inside pension funds, endowments, sovereign wealth funds and insurance portfolios has largely centered on the wrong questions. Institutional investors have tended to treat quantum computing as a single issue requiring a single decision, when in reality the technology presents distinct near-term and long-term challenges that require different responses.Quantum computing differs fundamentally from conventional computing because it uses “qubits” instead of binary bits. While classical computers process information as either zeros or ones, qubits can represent multiple theoretical states simultaneously through a property known as superposition. According to Calvello, this allows quantum systems to evaluate many possible outcomes at once, potentially accelerating certain forms of optimization, simulation and cryptographic analysis.“In simple terms, this means quantum computers can examine many possible answers at the same time, rather than serially,” Calvello writes. “This allows them to tackle certain problems that would take conventional computers too much time to be practical. Quantum computing is not a replacement for classical computing or AI; it is a complement, with the most promising near-term applications emerging from hybrid systems that combine the strengths of all three.”At the same time, Calvello notes that current quantum computers remain highly experimental. Today’s systems are prone to errors, contain relatively small numbers of qubits and are not yet capable of broad commercial deployment. Experts remain divided on when “fault-tolerant” quantum computers — machines reliable enough for industrial-scale use — will emerge, with estimates ranging from the end of this decade to well into the 2030s.Still, Calvello writes that institutional investors cannot afford to wait for technical certainty before acting.The Institutional Investor article identifies two separate issues confronting asset owners. The first is near-term cybersecurity exposure tied to quantum computing’s eventual ability to weaken current encryption systems. The second is the longer-term possibility that quantum-enhanced financial modeling, optimization,and simulation could create competitive advantages for firms that prepare early.According to Calvello, combining those timelines into a single conversation has created institutional paralysis. Some investors dismiss quantum computing entirely as too distant to matter, while others treat it as an imminent revolution poised to reshape finance overnight. Both positions miss the operational realities facing asset owners today, Calvello writes.The most immediate concern centers on cryptography. Modern financial systems rely heavily on public-key encryption to protect transactions, custody records, communications and settlement instructions. Researchers have warned for years that sufficiently advanced quantum computers could eventually weaken or break many of the encryption methods currently securing global financial infrastructure.Calvello points specifically to “harvest now, decrypt later” attacks. In such scenarios, malicious actors collect and store encrypted data today in anticipation of future quantum capabilities that could unlock it years later. That means sensitive financial information may already be vulnerable long before practical quantum computers arrive.The article cites the Bank for International Settlements, which has warned that the need for quantum-resistant encryption is urgent even though large-scale quantum computers do not yet exist. The BIS reported that the threat is effectively present-tense because data stolen today could potentially be decrypted in the future.Calvello also references the National Institute of Standards and Technology, which finalized its first post-quantum cryptography standards in 2024. Those standards are intended to help governments and businesses transition to encryption methods designed to withstand quantum attacks. NIST has urged organizations to begin migrating systems as soon as possible.According to Calvello, many asset owners remain largely unaware of where their custodians, prime brokers, administrators and cloud providers stand in that transition process. He writes that this represents a governance issue comparable to other operational risks trustees already oversee.The article reports that institutional investors should already be asking service providers basic questions about post-quantum migration plans, exposure assessments and implementation timelines. Failure to do so, Calvello writes, means organizations are already behind.Calvello also considers competitive preparedness to be a major challenge.Large financial firms are already establishing quantum partnerships, building internal expertise and experimenting with early-stage applications. Calvello mentions JPMorgan Chase, BlackRock, Goldman Sachs and Vanguard as institutions developing research programs and vendor relationships tied to quantum technologies.One example highlighted in the article involves a collaboration between HSBC and IBM. According to Calvello, the companies reported evidence that current quantum computers could improve certain algorithmic bond-trading predictions compared with some traditional approaches. HSBC executive Philip Intallura said the project represented a “tangible example” of how today’s quantum systems might eventually create competitive advantages in finance.Calvello compares the current quantum landscape to the rise of systematic and quantitative investing during the 2000s and 2010s. Firms that invested early in data infrastructure, research capabilities and risk systems gained structural advantages that later translated into performance benefits. Asset owners that failed to monitor those developments closely often recognized the shift only after underperformance emerged.The article reports that a similar readiness gap may now be forming around quantum technologies.At the same time, Calvello cautions against overreaction. Most asset owners do not need dedicated quantum research teams or internal laboratories, he advises. Instead, he recommends integrating quantum readiness into manager due diligence and beginning to ask external managers what research, partnerships, or capabilities they are developing.The article also indicates that many institutional investors may already have indirect exposure to the sector through venture capital funds investing in quantum hardware, cybersecurity and software startups. Calvello cites estimates from QED-C showing private venture investment in quantum technologies reached $4.9 billion in 2025, up more than 190% from the prior year.According to Calvello, conversations with venture managers about those holdings could provide asset owners with practical intelligence on competitive dynamics, commercialization timelines and technological credibility without requiring deep technical expertise.The article ultimately outlines three broad paths for institutional investors:Calvello writes that the second option is likely the most practical for most organizations.The article concludes that trustees do not need to understand quantum physics itself, but they do need to recognize that quantum computing presents both immediate cybersecurity concerns and longer-term strategic implications that are not yet being systematically addressed across much of the investment industry.Calvello, PhD, is the founder of C/79 Consulting LLC and writes extensively on the impact of AI on institutional investing.Share this article:Keep track of everything going on in the Quantum Technology Market.In one place.