The Financial Conduct Authority (FCA) has launched a new initiative to explore how quantum computing could help financial services firms tackle money laundering and fraud.

The regulator said its new Quantum Experimentation Group will bring together banks and other financial services firms with quantum technology providers and national research laboratories to test practical applications for the emerging technology.

The group, which the FCA says is the first regulator-led initiative of its kind, will launch in the first quarter of 2027.

Its initial focus will centre on how quantum machine learning could improve the detection of financial crime, including money laundering and fraud.

To support testing, the FCA will provide participants with a synthetic dataset. The artificially generated data aims to overcome one of the biggest barriers to experimentation by allowing firms to test new approaches without relying on sensitive customer information.

The regulator said the initiative will also help it better understand quantum computing's capabilities, limitations and the challenges firms face when experimenting with the technology. It plans to share findings from the group to inform future testing and regulatory thinking.

The regulator has invited financial services firms, quantum technology providers and national research laboratories to register their interest in joining the group by 31 December 2026.

According to the FCA, the group will support organisations at different stages of quantum adoption, from those exploring potential use cases for the first time to firms already carrying out advanced experimentation.

It will also define industry problem statements and work alongside participants to assess the practical opportunities and challenges associated with quantum technologies.

“We want to help firms explore where quantum could make a meaningful difference, and early experimentation is essential to understanding its potential in financial services,” said Jessica Rusu, chief data, information and intelligence officer at the FCA. “By bringing together firms, technology providers and researchers we can build readiness and identify practical applications for common industry challenges, starting with financial crime.”

Many banks have started to investigate quantum technology, including Lloyds Banking Group, which announced in April that it had carried out an experiment into how quantum computing could help to identify money mules.

Conducted in partnership with IBM, the experiment tested multiple quantum algorithms to see whether patterns of known money mule behaviours could be identified within a larger transactional graph.

In the same month BMO Financial Group announced the launch of a new enterprise-wide “centre of excellence” focused on the responsible development and governance of AI and quantum technologies.

The Canadian banking group said the BMO Institute for Applied Artificial Intelligence & Quantum will bring together expertise across data science, governance, ethics and commercialisation to accelerate adoption of AI and develop quantum capabilities across the organisation.

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