Wall Street is on borrowed time. For years, banks have relied on encryption to protect trillions of dollars in daily transactions. But with quantum computing advancing at breakneck speed, that security could soon be inadequate. While HSBC, IBM, and Microsoft are working on defenses, most of the financial industry remains far behind. The G7 Cyber Expert Group (CEG) has already warned that many institutions are unprepared for threats related to quantum computers.
That’s a mistake. Because when quantum decryption becomes a reality, it won’t just be another abstract tech issue – it could shake the foundations of global finance. At Disruption Banking, we’ve been asking the quantum questions for years. In today’s story, we share with our readers the nearing quantum threat and the steps some major financial institutions are taking to respond.
The conversation is no longer about if quantum computing will impact finance, it’s about when. The key question now is whether Wall Street can adapt in time to mitigate potential risks while leveraging the opportunities this technology offers.
The Financial Sector’s slow March toward a Quantum-Resistant future
Traditional encryption relies on mathematical complexity to secure financial transactions, making it practically impossible for classical computers to break. However, quantum computers operate differently. By using qubits and leveraging quantum properties like superposition and entanglement, they can solve problems exponentially faster than today’s machines. This computational power poses a potential risk to the security of the financial sector.
Take Bitcoin, for example. Its security depends on elliptic curve cryptography (ECC). Classical computers would take millennia to break this cryptography, but a sufficiently powerful quantum computer could do so in hours. That means an entire financial ecosystem, from digital assets to the $9 trillion U.S. Treasury market, could be at risk.
Regulators have taken notice. The NSA has set a 2025 deadline for organizations to begin implementing encryption methods, also known as post-quantum cryptography (PQC).
Transitioning financial infrastructure is a complex process. Many financial institutions still rely on legacy systems that lack the flexibility, or ‘crypto agility’, to adopt new encryption methods quickly. A 2024 report by the Financial Services Information Sharing and Analysis Center (FS-ISAC) highlighted this challenge, emphasizing the need for financial firms to conduct cryptographic inventories and prepare their systems for algorithm replacements to enhance resilience.
Proactive steps: HSBC, IBM, and Microsoft aren’t waiting
Some organizations are actively preparing for the shift. According to a Disruption Banking story, HSBC’s quantum-safe trials for tokenized gold are among the first of their kind, pointing out the seriousness with which the bank is approaching this risk.
HSBC and IBM have been collaborating since 2022 to explore quantum applications, including fraud detection, risk modeling, and blockchain security. IBM has set an ambitious goal of developing a 100,000-qubit quantum computer by 2033, while Microsoft recently introduced topological qubits, a novel state of matter for quantum computing. Their Majorana 1 processor, which currently features eight qubits, is designed with scalability in mind, potentially allowing for a million qubits.
This progress could lead to more robust and stable quantum computers, which could affect the timeline of potential threats, although some physicists call for further validation of these advancements.
Last year in May, Disruption Banking featured an interview with Zygmunt Lozinski, Global Lead on Quantum-Safe Networks at IBM. Zygmunt noted how “there is a huge amount of work and investment going into quantum computing around the world.”
Financial institutions are already focusing on PQC. Some are also looking into Quantum Key Distribution (QKD), a technology that uses the properties of quantum mechanics to securely exchange encryption keys. In 2023, HSBC conducted a successful €30 million foreign exchange trade secured by Quantum Key Distribution (QKD), in collaboration with BT, Toshiba, and Amazon Web Services (AWS) technology.
But, despite these promising advancements, HSBC projects that a full transition will take until at least 2030.
“It will take multiple years, and you need to start now. You must identify where to prioritize first. Interbank settlements are a good place to start for banks.” Zygmunt from IBM pointed out.
A Global Divide in Quantum Preparedness: who’s ready and who is not
While major financial institutions are investing in the cybersecurity needed to prepare for PQC, many others risk falling behind. This disparity could create vulnerabilities. Banks that delay the transition may become prime targets for cyberattacks once quantum decryption becomes a reality.
China is making major advances. Reports suggest that Chinese researchers are aggressively developing quantum decryption methods. Last year, Shanghai University researchers factored a 50-bit RSA integer using quantum computing. Although this did not pose a direct threat to modern encryption, it was fairly claimed by some mainstream media to have successfully hacked a “military-grade encryption.” A so-called hype that was later debunked by a Forbes post. However, the experiment underscored the rapid progress being made in the field of quantum computing.
Meanwhile, financial hubs such as Singapore are actively preparing. In 2024, Singapore’s Monetary Authority (MAS) partnered with banks like DBS and UOB to conduct trials on quantum-secure financial transactions.
Women Leadership in Quantum Computing
Per an earlier Disruption Banking article, women are making significant contributions to quantum computing. Names like Sabrina Maniscalco, Finnish quantum healthcare company Algorithmic CEO, Paulina Mazurek, co-founder and CEO at computing software firm BEIT, Q-Lion founder Andrea Rodriguez-Blanco, and Iris Schwenk, German software firm, HQS Quantum co-founder and COO, are some names of women lending their voices in quantum development.
The Fork in the Road: Evolve or Collapse
Quantum computing represents both a challenge and an opportunity for the financial industry. McKinsey estimates that quantum technology could unlock up to $700 billion annually through improved trading algorithms, fraud detection, and risk assessment. At the same time, failing to prepare for PQC could lead to disruptions on an unprecedented scale.
The timeline for quantum disruption is uncertain, but the window for preparation is narrowing. Leading financial and technology firms, governments, and regulators, must now move beyond the outdated belief that quantum threats remain decades away.
Institutions can either act now and thrive, or delay and become vulnerable to the very technology that could drive the industry forward.
Author: Richardson Chinonyerem
See Also:
Will 2025 be the year of women in quantum computing ? | Disruption Banking
HSBC pilots quantum-safe technology for tokenised gold | Disruption Banking
How IBM is ensuring that the World is Quantum Safe | Disruption Banking
How IBM’s cloud makes quantum computing safe for banks | Disruption Banking
