The Monetary Authority of Singapore (MAS), in collaboration with DBS, HSBC, OCBC, UOB, SPTel and SpeQtral, has completed a proof-of-concept (PoC) sandbox to evaluate the use of quantum key distribution (QKD) for secure communications in the financial sector. This follows the signing of a Memorandum of Understanding (MoU ) between the parties in August 2024 to explore the technical viability, effectiveness and applicability of quantum-safe technologies in financial services, as well as the Post-Quantum Cryptography (PQC ) experiment with Banque de France last year.
The QKD sandbox enabled MAS and the participating banks (DBS, HSBC, OCBC, and UOB) to collaborate and deepen our understanding of quantum security technologies, such as QKD. The sandbox also provided insights into the benefits and limitations of QKD solutions, that will guide MAS and the participating banks in making informed decisions on quantum-safe strategies and bolster the sector’s cyber resilience against quantum threats.
Through the sandbox, MAS and the participating banks were able to deploy a QKD solution jointly provided by telecom firm SPTel and startup SpeQtral to validate that QKD can be used to securely transfer sensitive data.
Key findings include:
- QKD has the potential to strengthen the security of communication networks. Financial institutions (FIs) can use QKD to secure connections, including between data centers and FI premises.
- Need for QKD providers and the telecommunications sector to continue strengthening QKD security assurance. This includes establishing comprehensive standards for tamper-resistant, auditable trusted nodes with multi-layer security measures.
- More work needs to be undertaken to achieve greater interoperability between different QKD providers. For QKD to be widely adopted in the financial sector, it needs to be able to readily interoperate across different QKD providers and seamlessly integrate into FIs’ diverse IT environments.
The sandbox also highlighted the need for strong senior management support to build in-house competency and allocate sufficient budget and resources to work on quantum-safe initiatives.
Vincent Loy, assistant managing director (Technology) and chief technology officer at MAS, said in a statement: “MAS is committed to collaborating with the financial industry to trial promising cybersecurity technologies that can help to safeguard critical financial systems and data against emerging quantum threats. The QKD sandbox marks a significant step in exploring the potential use of quantum-safe solutions within IT systems and networks within the financial sector.”
Eugene Huang, Group chief information officer at DBS, said in a statement: “Having partnered our banking and technology peers to pilot the deployment of QKD to bolster network security, we now have a clearer understanding of the security standards and implementation challenges that need to be addressed to build a robust quantum strategy. With cybersecurity threats becoming increasingly sophisticated, DBS is committed to deepening our collaboration with the MAS and industry to ensure that banking services remain safe, secure and resilient for our customers.”
Tancy Tan, chief operating officer at HSBC Singapore, said in a statement: “The migration to quantum safety is not only a necessity, but also an opportunity to develop novel technologies and enhance long-term quantum cybersecurity resilience. QKD can provide, in a defense-in-depth approach, added security in those places where it is most important, and is a milestone on the path toward fully functional quantum networks. With the recent establishment of our Quantum Centre of Excellence in Singapore, HSBC is committed to partnering with the Singapore ecosystem to drive the advancement of quantum technology.”
Praveen Raina, head of Group Operations and Technology at OCBC, said in a statement “This initiative has deepened our understanding of quantum key distribution and its practical applications. As quantum technology continues to present both opportunities and challenges, we have made strategic investments in infrastructure, talent development and upskilling, while actively engaging with leading ecosystem players.”
Lawrence Goh, head of Group Technology and Operations at UOB, said in a statement: “The sandbox has given all of us a glimpse of the potential as well as challenges presented by quantum security technologies in safeguarding communications in the financial sector. We will be looking very closely into this area and are committed in contributing to the resilience of the financial sector against quantum security threats.”