As we reach the limits of transistor-based computing, quantum technology presents new security risks that could disrupt current encryption schemes and create disruptions. Astute decision-makers can address these threats by remaining informed about emerging standards as well as prioritizing and inventorying their most essential datasets.
Quantum Key Distribution (QKD) employs quantum particles’ inbuilt security features to transmit information in an infallibly secure way, with no risk of eavesdropping or tampering from third parties.
Quantum cryptography employs quantum physics to make undetected eavesdropping impossible. One method, quantum key distribution (QKD), transmits photons containing secret keys. When Eve attempts to intercept them, she is forced to measure in an incorrect state or polarization which creates errors that Alice and Bob can detect by comparing measurements at the end of transmission.
Quantum computers could process mathematical problems exponentially faster than current computers and crack public key algorithms used for online banking and car-to-everything communications, which would put our cybersecurity infrastructure in peril; often referred to as the Y2Q threat. However, we can prepare for it now by adopting new cryptography; specifically using quantum-safe encryption algorithms like lattice-based encryption for initial communication between colleagues or clients and then switching over to symmetrical encryption for remaining data.
Quantum cryptography provides a secure means of exchanging secret keys over secure channels. Once transferred, an eavesdropper positioned between Alice and Bob would find it extremely difficult to steal any of their information as their ability to detect quantum interference would simply not exist.
However, the technology is not widely accessible yet. At present, it requires special fiber optic connections between parties in order to operate, limiting its applications only to those needing the highest levels of security. Quantum communication systems may soon cover larger distances than current technologies allow.
Financial institutions must immediately begin assessing the risks posed by quantum computers and developing plans to migrate their public-key encryption to quantum-safe algorithms. If they delay, their data could become vulnerable to attacks that can be carried out quickly compared to current methods – risking both sensitive data as well as endangering global financial systems.
Quantum cryptography’s physical characteristics render it virtually hack-proof, which explains why in 2004 Bank of Austria and Vienna City Hall successfully accomplished the world’s first quantum-encrypted bank transfer; and why companies like ID Quantique use quantum photons to link data centers.
Quantum Key Distribution (QKD) relies on sensitive quantum-light signals sent down the same fibers that transport Internet traffic. Each signal encodes digital zeroes or ones, which are detected at both ends by a quantum cryptographic circuit that produces a secret key only known to Alice and Bob.
QKD uses frequent key refreshes to protect itself against quantum attacks, but this incurs considerable computational costs. To determine when it would be practical to implement quantum encryption for high-priority products or systems, organisations need to collaborate internally on developing an understanding of which data and systems are vulnerable against quantum threats.
Quantum Key Distribution (QKD) is one of the more established applications of quantum cryptography, providing an encrypted message without revealing any of its content to one party while keeping any attempts from being observed through quantum principles.
QKD transmission utilizes photons – quantum particles of light – as messengers to transfer key information between parties. Quantum mechanics state that any attempts at observation cause photons to change state, enabling both parties to confirm each other is not spying on one another.
Risk managers should begin considering ways to mitigate against quantum computers even though fully error-corrected versions won’t likely arrive until 2030. They will need to assess when taking action should occur by considering factors like shelf life of critical data and systems under protection as well as current encryption protocol performance requirements (Exhibit 1).