HSBC tests protecting FX trading from quantum computer attacks (updated)

Toshiba

06/12/2023 14:25

(Adds Amazon Web Services quote in paragraph 14)
    By Sinead Cruise and Lawrence White
       LONDON, Dec 6 (Reuters) - HSBC  HSBA.L  has completed
what it says is the world's first trial of a tool designed to
protect highly sensitive financial data from cyber criminals
seeking to harness the power of next-generation quantum
computers to launch future attacks.
    The British bank said it used the tool to safeguard a trade
on its proprietary platform, HSBC AI Markets, exchanging 30
million euros for U.S. dollars.
    The test, details of which are reported here for the first
time, shows how banks are trying to get ahead of cyber criminals
who could use advances in computing to access trading data in
global financial systems such as the $7.5 trillion per day
foreign exchange market.
    "While we take the view that we are some distance away from
quantum computers being able to break traditional encryption,
the time to prepare for this is now," Colin Bell, CEO of HSBC
Europe, told Reuters. 
    HSBC's test ran on a network created by British
telecommunications company BT  BT.L  and using devices developed
by Toshiba as well as support from Amazon Web Services.
    The test is an important step in showing the commercial
applications of the technology using currently available fibre
networks, said Andrew Shields, head of quantum technology,
Toshiba Europe.
    Howard Watson, Chief Security and Networks Officer, BT
Group, said it was critical that digital infrastructure remained
secure against new quantum-based threats.
    HSBC said the test helped it plan how it could roll out to
some of its trading systems a form of encryption known as
quantum key distribution (QKD). 
    QKD uses particles of light to deliver secret keys between
parties that can be used to encrypt and decrypt sensitive data,
the bank said.
    "The protection of both the bank's data and our clients'
data is something that we take with the utmost seriousness,"
said Richard Bibbey, global head of foreign exchange, emerging
market rates and commodities at HSBC.
    "Were someone to be able to eavesdrop on the flows that go
across the largest foreign exchange institutions, they will have
a significant amount of information, the capacity to manipulate
the market and to understand what trades have been executed
before they have been risk-managed."
    Quantum computers promise to be millions of times faster
than today's most powerful supercomputers, potentially
revolutionizing everything from medical research to battling
climate change.
    Banks worldwide are working on how to take advantage, as
well as how to protect themselves against any risks.
    "Bringing quantum key distribution to a trading scenario is
a real-world example of how this technology ... establishes a
model for even more use cases to help customers stay secure,"
Simone Severini, general manager, quantum technologies at Amazon
Web Services  AMZN.O , said.
    Some 297 patents for so-called Post Quantum Cryptography, or
systems resistant to quantum computing attacks, have been filed
in the United States alone since 2015, according to John Egan,
CEO of independent BNP Paribas research subsidiary L'Atelier.
    Some experts are sceptical of the immediate practical
implications of the QKD technology for financial markets. 
    Authorities say its specialist hardware requirements make
QKD impractical for many potential end users, said Martin
Albrecht, professor of cyber security at King's College London