G7 Cyber Expert Group urges banks to act now to avoid future quantum catastrophe

The G7 CEG encourages financial authorities to work closely with firms and other relevant parties in their jurisdiction to raise awareness of the importance of the transition to quantum resilient technologies.

Banking regulators have put the financial industry on notice that they must begin immediately developing plans for mitigating quantum computing risks, according to Finextra.

A report by the G7 Cyber Expert Group (CEG) – chaired by the US Department of the Treasury and the Bank of England – highlights the potential cybersecurity risks associated with developments in quantum computing and the steps that must be taken for financial authorities and institutions to address those risks.

One of the most serious threats highlighted is the ability of superfast computers to break the current cryptographic encryptions mechanisms used to protect customer data and IT systems.

„While the exact timeline for developing quantum computers with these capabilities is uncertain, there is a real possibility that such capabilities could emerge within a decade,” the report notes. „These quantum computers would not only put future data at risk, but also any previously transmitted data that cyber adversaries have been able to intercept and store with the intent of decrypting later with quantum computers. Due to the potentially long lead time needed to put in place quantum-resilient technologies, the time to start planning is now.”

Quantum Computing & the Financial System
Quantum computers are being developed that are expected to be able to solve computational problems currently deemed impossible for conventional computers to solve within a reasonable amount of time. Financial institutions may benefit from the computational speed that quantum technology enables through the optimization of market trading, investment processes, including those for risk management, internal operations, and prediction strategies.

Moreover, quantum computing may support more efficient payment processing as well as dynamic optimization of portfolio holdings. Technologies such as quantum key distribution may also help organizations to better secure their digital communication systems.

„Financial institutions will need to prepare to manage the potential risks of these new quantum applications as they are deployed. In addition, the introduction of quantum computers may provide an opportunity for nefarious actors to exploit the technology for malicious purposes in a way that creates both organizational and systemic risks in the financial system.” – according to the report.