Are you ready?

The financial sector has a lot to lose once quantum computers become capable of breaking public key encryption. Now that the National Institute of Standards and Technology (NIST), a US Department of Commerce agency, has published post-quantum cryptography (PQC) standards, today’s data and communications can be protected from future decryption — the so-called “harvest now, decrypt later” scheme we know is underway.

Unfortunately, having standards available does not suggest that a widespread migration is either underway or pending. Despite the sense of urgency that ought to be apparent, what can we say about the readiness of the private sector in general and the financial sector in particular to prepare for Q-Day?
 

What should you do?

This is the second article of a series on PQC. The first article, “Securing tomorrow: how NIST's post-quantum encryption standards will impact the financial sector,” provides a brief introduction to the problem. It summarizes the threat quantum computers pose to certain encryption protocols, the projected timeline for this, two methods for protecting against it, background on the new PQC protocols, the challenges of migrating to these protocols, and actions companies can take to become quantum-ready, as well as a teaser for this current article. It is universally recommended that any organization with durable data — that is, data that will remain relevant and valuable for at least the next few years — migrate to these new PQC standards as soon as possible under the presumption that the data is being stored by adversaries for eventual decryption.
 

Break it down

Migrating to PQC protocols requires two major components. First, there must be tech providers that can assess an organization’s needs, execute the actual transition, and potentially certify that the client’s data is secure from known quantum and classical attacks. Second, a company must start its journey toward becoming “quantum safe.” To prepare for the latter, companies can establish quantum taskforces and internal strategies.
 

Tech providers

Tech providers are key to the transition, and the good news is that they are ready to help. In fact, many have been ready for quite some time, working with clients to protect data while waiting for the NIST to finalize its standards. 

• Cloudflare reports that a preliminary PQC protocol that has been protecting key agreements since 2022 already protects more than 16% (up from under 2% last year) of human-generated requests to its servers. This will be phased out in favor of a hybrid solution using a PQC standard with another protocol. Post-quantum signatures will be adopted once consensus has been reached on a migration path. Experts project that certifications will become available in 2026 [8][16].

• Amazon Web Services (AWS) provides the AWS Libcrypto (AWS-LC) general-purpose cryptographic library for both its own and customer usage. The library includes two PQC protocols as well as experimental protocols. AWS contributes to Open Quantum Safe, an open-source project supporting the continued development of PQC protocols [1]. 

• Palo Alto recommends actions that can be taken immediately to secure VPN connections; these measures address a variety of potential vulnerabilities. Palo Alto has also adapted a Quantum Economic Development Consortium (QED-C) model for PQC migration to a five-step model that includes assessing the preparation, time, and resources required to migrate to PQC protocols [11].

• Google has been exploring PQC for over a decade, including the establishment of a hybrid key exchange pilot program with the Chrome browser in 2016. This program expanded in 2019 in partnership with Cloudflare and again in 2021 with the resolution of an incompatibility with an unnamed vendor [15].

• IBM has developed tools to aid in the discovery of vulnerabilities across an entire supply chain. These tools include visualizations to assist with code analysis, which helps clients prioritize assets for PQC migration and facilitates collaboration with vendors on external vulnerabilities. The analysis can help another vendor with executing the migration, with one option being IBM Consulting, which has been offering this service for three years [9].

• Keysight Technologies has introduced the first-known device that tests the implementation of one of the PQC protocols [10].

• SafeLogic has introduced an early access program (EAP) to allow customers to begin working with implementations of the three major algorithms that NIST has been working to standardize [7].

• Zoom is the first videoconferencing company to introduce end-to-end PQC encryption [19].
   

This is not meant to be an exhaustive list. The key takeaway is that the availability of tech providers should not be an obstacle to PQC migration. From that perspective, financial companies can migrate to PQC protocols now; the second part of the question is whether or not they actually will.
 

Financial companies 

McKinsey & Company reports that the financial services sector is one of four industries that is likely to realize the earliest economic benefits from using quantum computers [3]. However, does anticipation of benefiting from quantum computing translate into preparation for the eventual threat it poses? Moody’s and Corinium Global Intelligence collaborated on a survey to explore this further [2].

The quantitative portion of this research posed 15 multiple-choice questions using a phone-assisted online survey to 200 data, analytics, and innovation leaders in financial services and banking firms from 17 European and North American countries. All respondents come from firms with no less than $100 million in annual revenue. Participants include chief technology officers, chief data officers, chief data and analytics officers, and heads or directors of innovation [2].

• To start, 87% of respondents report having insufficient budgets to investigate quantum computing, while 73% report not finding classical bottlenecks that might benefit from quantum computing [2]. 

• Current experimentation with “post-quantum cryptography devices/platforms,” at less than 10% of respondents, trails current experimentation with “quantum-inspired algorithms,” “quantum random number generators,” and “analog quantum computing simulators” [2].

• No interest in “post-quantum cryptography devices/platforms,” at greater than 10% of respondents, exceeds no interest in “quantum-inspired algorithms” and “quantum random number generators” [2].

• Only 54% of respondents view cybersecurity as a quantum computing use case with transformative potential. This trails behind risk analysis (67%) and stress testing (59%), although it is ahead of synthetic data (49%) and the detection of fraud and money laundering (34%) [2].

• Only 14% of respondents report that they are “actively developing quantum computing capabilities either in-house or with external partners.” The top-three operational challenges are reported as the “immaturity of quantum technologies” (82%), followed by “lack of buy-in from C-level executives” (48%), followed by “general skepticism about the potential of quantum computing” (41%) [2].

• A full 86% of respondents report that their organizations are not post-quantum ready, even though 84% of respondents foresee a need for PQC within the next two-five years. Only 13% of respondents believe that serious preparation is required today. Another 29% foresee a need in two years, 55% foresee a need in five years, and 3% foresee a need in 10 years, while 0% foresee the threat as never materializing at any point in the future [2].
   

In addition to the survey results, observations have been made at various quantum technology workshops throughout 2024.

• Investors have been switching their attention from quantum technologies to generative artificial intelligence (GenAI), especially in the United States. Ironically, rapid advancements in AI-powered classical quantum computing might accelerate Q-Day’s arrival. [13] 

• An IQM report shows that government investments have made up for the private investment gap [14]. Government programs are tailored for specific purposes, though; therefore, specific programs might be needed to fund PQC migrations.

• Europol’s Quantum Safe Financial Forum is a multi-stakeholder (including Moody’s) initiative to address the financial sector’s transition to PQC. Meanwhile, the European Commission recommends that member states coordinate and synchronize government and public-sector migrations [12].
   

Based on the survey, there does not seem to be a sense of urgency within the financial industry to migrate to PQC protocols. Standards are ready and Europe is discussing the transition, but individual players see this as an issue in the near future rather than in the present day.
 

Conclusion

Unfortunately, potential threats remain on the horizon. A paper from Tsinghua University briefly threatened PQC protocols, claiming they were vulnerable to quantum attacks after all, but this was quickly disproven [6]. Grover Adaptive Search threatens the Advanced Encryption Standard and symmetric encryption, Quantum-Accelerated Deep Learning and a faster Shor’s algorithm threaten Rivest-Shamir-Adleman encryption, and the Harrow-Hassidim-Lloyd algorithm threatens some PQC protocols [4][18].

These threats highlight the need to look beyond PQC to quantum key distribution (QKD), entanglement-based QKD, and eventually entanglement-based quantum networks for maximum security. However, these three technologies have not been widely deployed yet, leaving PQC as the only current option to secure durable data from future decryption. Tech providers are ready to help financial companies through the transition, but most financial companies are not reporting any sense of urgency in migrating. 

To prepare for migration and develop a sense of urgency, each company should build a crypto inventory. A cryptographic inventory facilitates the prioritization of systems by identifying hardware, software, algorithms, keys, signatures, and data longevity [17]. Each company also needs to adopt crypto agility. Cryptographic agility allows real-time application of algorithms to threats, adoption of novel features or algorithms, and the retiring of systems as they become vulnerable to future threats or obsolete to novel systems [5].

Finally, it is important to remember that durable data is not vulnerable in the future tense, meaning after large-scale, fault-tolerant quantum computers have been developed. Durable data is being stored by adversaries today and may be decrypted before it becomes irrelevant. Encrypting this data in the future does not protect the data that is being captured and stored today. Such data should be considered vulnerable already, and financial companies need to change their timelines to reflect that.
 

References

1. Amazon Web Services.  “Post-Quantum Cryptography: Bringing quantum-resistance to AWS services and customers.” AWS Cloud Security. 2024. 
2. Badhwar, Raj; Egger, Daniel J; Gago, Sergio; König, André M; Suarez, Steve; van Velzen, Julian. “Quantum Computing in Financial Services: A Business Leader’s Guide.” Moody’s and Corinium. 2023.
3. Bogobowicz, Michael; Gao, Scarlett; Masiowski, Mateusz; Mohr, Niko; Soller, Henning; Zemmel, Rodney; and Zesko, Matija. “Quantum technology sees record investments, progress on talent gap.” McKinsey Digital. April 24, 2023.
4. Campbell, Robert; Diffie, Whitfield; and Robinson, Charles. “Advancements in Quantum Computing and AI May Impact PQC Migration Timelines.” Preprints. February 22, 2024.  
5. Chen, Lily “Crypto-Transition and Agility.” Computer Security Division, Information Technology Lab, National Institute of Standards and Technology. 2024.
6. Chen, Yilei. “Quantum Algorithms for Lattice Problems.” Cryptology ePrint Archive, Paper 2024/555. 2024.
7. Donaldson, Mike. “SafeLogic Announces Post-Quantum Cryptography (PQC) Early Access Program at RSA Conference 2024.” Le Lézard. May 6, 2024.
8. Gonçalves, Vania; Valenta, Luke; and Westerbaan, Bas. “NIST’s first post-quantum standards.” The Cloudflare Blog. August 20, 2024. 
9. Janechek, Jennifer; Moskvitch, Katia; Osborne, Michael. “NIST’s post-quantum cryptography standards are here.” IBM Research. August 13, 2024.
10. “Keysight Introduces New Testing Capabilities to Strengthen Post-Quantum Cryptography.” Business Wire. April 30, 2024. 
11. “Network Security: Post-Quantum Migration Planning and Preparation.” Palo Alto Networks, TECHDOCS. December 8, 2023.
12. Quantum Safe Financial Forum. Europol. May 7, 2024.
13. Robinson, Dan. “Investors threw 50% less money at quantum last year.” The Register. January 31, 2024. https://www.theregister.com/2024/01/31/quantum_sector_saw_50_percent/
14. “State of Quantum 2024 Report: Quantum resilient to investment slowdown with widespread government backing.” IQM, Lakestar, and OpenOcean. January 29, 2024.
15. Venables, Phil. “How Google is preparing for a post-quantum world.” Google Cloud Blog. July 6, 2022.
16. Westerbaan, Bas. “The state of the post-quantum internet.” The Cloudflare Blog. March 5, 2024.
17. Young, Shalanda. “M-23-02 Memorandum on Migrating to Post-Quantum Cryptography.” Executive Office of the President, Office of Management and Budget. November 18, 2022.
18. Zewe, Adam. “Toward a code-breaking quantum computer.” MIT News, Massachusetts Institute of Technology. August 23, 2024.
19. “Zoom bolsters security offering with the inclusion of post-quantum end-to-end encryption in Zoom Workplace.” Zoom. May 21, 2024.