The Monetary Authority of Singapore has gathered a consortium of banks and technology partners to study the application of Quantum Key Distribution (QKD) as a defensive mechanisim against the threat posed by super-fast computing power.
In February 2024, MAS issued an advisory to all financial institutions on the cybersecurity risks associated with quantum technology, encouraging them to carry out proof-of-concept trials with quantum security solutions. The regulator believes that the industry needs to attain 'cryptoagility' to be able to efficiently migrate away from the vulnerable cryptographic algorithms to post-quantum cryptography without significantly impacting their IT systems and infrastructure.
The central bank has since commited $100 million in grant funding to support the development of AI and quantum computing technologies in the financial sector, including for pilots that explore the use of Post-quantum Cryptography and Quantum Key Distribution to safeguard firms’ critical data.
QKD, a secure communication method for exchanging cryptographic keys only known between shared parties, is seen as a key protective layer in defence aginst quantum breakthroughs.
In the coming months, MAS and participating banks - HSBC, UOB, DBS and OCBC - will experiment with QKD solutions jointly provided by SPTel and SpeQtral.
The project partners will engage on a QKD proof-of-concept sandbox on financial sector use cases to evaluate its viability, effectiveness and applicability to financial services, and determine the feasibility of using QKD for quantum-safe communications within the financial sector.
Vincent Loy, assistant managing director (Technology), MAS, says: “As quantum technology advances, it is vital for the financial sector to safeguard against potential cybersecurity threats that may be brought about by the technology. The proof-of-concept trials will help MAS and financial institutions better understand QKD’s potential impact on operations and address challenges early. These technology trials can also inform and shape technology and cyber risk management policies towards quantum-proofing our financial systems.”