While quantum computing holds promise for financial institutions, its eventual risk is also enormous: Experts estimate that quantum computers may one day be able to break current encryption systems in seconds.

France’s central bank worked with CryptoNext Security on an experiment to use so-called “post-quantum” algorithms to operate a data exchange system that’s resistant to the power of future quantum computers. 

This report closely follows a new whitepaper from post-trade market infrastructure firm DTCC that explores how “the quantum technology threat is coming” within the next decade and why financial institutions need to start developing their playbooks for new encryption now.  

“The banking industry handles long-term sensitive data, so banks need to protect themselves and their communications now against ‘harvest now, decrypt later’ activities,” CrytoNext CEO Florent Grosmaitre told Insights Distilled. Banks should “take inventory of their cryptography” and begin building a playbook for the years-long process of upgrading, he said, adding that CryptoNext is working with another large European bank on quantum-resistant digital signatures. IBM and Thales are also offering post-quantum cryptography services. 

Meanwhile, the likes of HSBC, JPMorgan, Ally, and Credit Agricole are experimenting with ways to use quantum computing technology for their benefit, like improving speed and precision of risk analysis, fraud detection, and the pricing of complex derivatives.