Insider Brief
- Switzerland’s financial sector is facing escalating risks from quantum computing, leading to a new seven-step action plan intended to maintain its reputation as a reliable global financial hub.
- The Swiss Financial Innovation Desk raises alarms about imminent threats, including the “Harvest Now, Decrypt Later” approach, urging a collaborative shift towards quantum-safe cryptography.
- The plan advocates for the establishment of risk governance, the reduction of legacy systems, alignment with international standards, and an ongoing commitment to quantum readiness.
- Image: Delegates visited IBM’s Zurich Research Lab on March 4 as part of a FIND-led mission to explore the financial risks and benefits of quantum technology. The lab, IBM’s first outside the U.S., is recognized for contributing to two Nobel Prize-winning discoveries.
Swiss financial institutions are under increasing pressure from quantum computing advancements, with a new plan highlighting the urgency for measures to ensure security and competitive edge.
The Swiss Financial Innovation Desk (FIND) has released a seven-step action plan aimed at preparing the nation’s finance sector for the reality of quantum computers potentially compromising current encryption methods. The organization warns that failure to act promptly may jeopardize Switzerland’s status as a trusted global hub, especially in light of threats like “Harvest Now, Decrypt Later,” where hackers could pilfer encrypted data now for future decryption once quantum capabilities become robust enough.
Quantum computing could undermine prevalent encryption algorithms, putting financial transactions, client information, and internal communications at risk. The FIND report, Action Plan to a Quantum-Safe Financial Future, emphasizes that substantial developments in quantum computing are anticipated by 2028, leaving scant time for procrastination.
“The threat posed by quantum computing is no longer simply theoretical,” the report asserts. “Emerging studies and industry data suggest that the timeline for quantum computing imperatives is accelerating, shifting from the 2030s to potentially as early as 2028, intensifying worries about imminent risks to cryptographic systems.”
Due to its dependency on secure data and its reputation as a safe booking center, the Swiss financial center is notably at risk. With around $2.6 trillion in assets under custody, its appeal is fundamentally based on trust.
Seven-Step Plan
The seven-step action plan urges financial institutions to first create quantum risk governance — a collaborative leadership initiative to evaluate and counter quantum threats. Next, organizations should identify which business operations and technical systems may be impacted by the risks associated with quantum cryptography. A pivotal action involves reducing reliance on outdated legacy systems while prioritizing the acquisition of quantum-safe technologies.
Highlighting the urgent menace of “Harvest Now, Decrypt Later,” which involves criminals gathering encrypted financial data now to decode later using quantum tools, FIND calls for companies to devise migration strategies towards quantum-safe cryptographic standards, aligning with guidelines from prominent regulatory bodies like the U.S. National Institute of Standards and Technology (NIST).
Lastly, the report suggests that financial institutions should consider quantum readiness a continuous journey, necessitating regular evaluations and strategy adjustments to remain vigilant against emerging threats.
While Switzerland has historically adopted a “technology-neutral” stance on financial regulations, FIND contends that this approach is now insufficient.
A collective yet voluntary response is essential, as outlined in the report, stressing that the financial sector must not await regulatory mandates. The document references extensive consultations between FIND and institutions such as the Swiss National Bank, the Federal Office for Cybersecurity, and the military’s cryptology and cyber defense units as indications of increasing institutional apprehension.
Delegation Hosted at IBM’s Zurich Research Lab
As part of its awareness initiative, FIND organized a visit for a delegation to IBM’s Zurich Research Lab, the company’s first facility outside the U.S. and known for two Nobel Prize-winning advancements. The excursion, which took place on March 4, was a segment of FIND’s “fact-finding mission” aimed at enhancing comprehension of quantum technology’s ramifications for finance.
Despite the risks identified, the report also signals a potential opportunity. If Switzerland acts swiftly, it could spearhead the global shift towards quantum-safe finance. Thanks to its compact size and historically adaptable institutions, the nation could transform its vulnerabilities into a competitive advantage.
“The Swiss financial sector can not only address these emerging risks but also establish itself as a global leader in quantum-safe financial services,” asserts Eva Selamlar-Leuthold, Head of the Swiss Financial Innovation Desk, in the accompanying LinkedIn announcement regarding the plan.
