HSBC, Vodafone are leading the way in quantum encryption

HSBC UK will test an experimental quantum-secure subway network in London in the hope of preparing for potential future security threats, while Vodafone is looking to protect users of its phone network from potential quantum threats to encryption codes.

HSBC said it intends to use a quantum-secure metro network to assess the secure transmission of data between its global headquarters in Canary Wharf, in London's Docklands, and its data center in Berkshire, 62 kilometers (38 miles) away.

According to the bank, it will use the network for financial transactions and secure video communications, as well as for one-time keyboard encryption, and will test the network's use in edge computing by connecting AWS Snowball Edge devices.

The network in question, which BT announced last year, uses quantum key distribution (QKD) over a standard 10Gbps fiber optic connection to ensure end-to-end transmission.The QKD hardware and key management system, in turn, is being supplied by Toshiba, and the whole thing is a three-year commercial trial to gauge the viability of a quantum-secured metropolitan area network.

BT has already had the network tested by accountancy firm Ernst & Young (EY) to connect two of its sites in London: one in Canary Wharf and the other near London Bridge.

QKD is a method of securely distributing encryption keys by encoding information into the quantum states of individual photons. Once this is done, the key can be used to encrypt transmissions and exchange information normally.

The tricky part in all this is setting up the network so that QKD can use the same fiber optics as the data traffic, rather than requiring dedicated lines.

HSBC sees its quest for quantum-secure communications as a way to gather important evidence about the effectiveness of the technology and to advance the development of future financial security applications. In a statement from Colin Bell, Chief Executive of HSBC, HSBC Europe, he said, "Our customers, clients and employees expect us to have secure operations and resilient cybersecurity, so it's important that we stay ahead of the curve."

They added that HSBC is recruiting trained experts while conducting trials and investing in strategic partnerships to explore how these technologies can be deployed as they evolve.

The bank said it processed 4.5 billion payments worth around £3.5 trillion for customers last year - transactions that rely on encryption to protect them from potential fraud or theft.

Meanwhile, Vodafone is more concerned about the potential for quantum systems to break encryption codes and is testing a quantum-secure virtual private network (VPN) for smartphones.

On July 5, the telecom giant said it had teamed up with SandboxAQ, a startup that spun off from Google's parent company Alphabet last year, to conduct proof-of-concept tests of a quantum-secure VPN using standard smartphones.

Vodafone said the VPN has been adapted to use encryption codes developed by the US National Institute of Standards and Technology (NIST) - so-called quantum-resistant cryptography (PQC) algorithms - which are thought to be resistant to cracking by quantum methods.

According to Luke Ibbetson, Vodafone's head of research and development, the company is concerned about so-called "store now, decrypt later" attacks: malicious actors could harvest encrypted sensitive communications in the hope of decoding them in the future using quantum systems.

According to Ibbetson, "While cryptographically relevant quantum computers may still be years away, the threat posed by quantum-empowered attackers is already here today."

The Vodafone-SandboxAQ Quantum Secure VPN project evaluated the impact of the PQC algorithm on this critical telecom service without compromising the customer experience. In the project, Vodafone built the first quantum-secure VPN for quantum-secure Internet protocols and analytics using new technology and customized SandboxAQ software.

Vodafone said it has been testing a variety of PQC algorithms, focusing on their potential performance impact in activities such as web browsing, chat app usage, video and audio streaming and mobile gaming. It reported that a hybrid encryption approach using both classical and "best-fit" PQC algorithms had the least impact on quality of service, while still providing quantum-resistant security.

Reference link:

[1] https://www.bloomberg.com/news/articles/2023-07-04/hsbc-tests-quantum-tech-in-london-to-guard-against-future-hacks

[2]https://www.hsbc.com/news-and-media/media-releases/2023/hsbc-becomes-first-bank-to-join-the-uks-pioneering-commercial-quantum- secure-metro-network

[3]https://www.vodafone.com/news