Quick Self-check
Can your organization identify where public-key cryptography is used, how long critical data must remain confidential, and which systems cannot be easily upgraded?
If the answer is unclear, quantum-readiness planning should begin in 2026. Scalence can help turn that uncertainty into a practical, risk-based migration roadmap.
Quantum computing used to seem like a far-off issue for banks, but that is no longer the case. Financial institutions now need to consider how new quantum technology could affect the encryption that protects customer data, payment systems, digital identities, and interbank communications.
It is important not to wait for a powerful quantum computer before taking action. Moving to new systems will need coordination across technology, vendors, applications, policies, testing, and business decisions. If you delay planning, you may face higher costs, fewer options, and more pressure from regulators, customers, and your board.
This blog is dedicated to protecting your crucial data from quantum threats. Let’s get started.
Why quantum-safe security matters to BFSI now
The biggest immediate risk is the “harvest now, decrypt later” threat. Under this threat, the attackers collect encrypted data today and keep it until a powerful quantum computer is available. Then, they might decrypt information that seems secure now. NIST highlights this as a main reason to start using post-quantum encryption before these computers exist.
For banks and insurers, the risk extends beyond a single stolen transaction. Information such as customer identity records, loan documents, insurance claims, health details, strategic plans, and financial records can remain sensitive for many years.
This is a business risk as well as a security issue. A future data breach could lead to regulatory action, customer losses, legal costs, damage to your reputation, and disruption of key services. Stronger traditional encryption is still important, but it does not eliminate the need to address threats to public-key systems that support authentication and secure information exchange.
Quantum-safe security needs to be part of your resilience and trust strategy. Customers expect their information to be protected for its entire lifecycle, not just with the technology available when it was collected.
It is important to plan ahead before migration pressures increase. The Bank for International Settlements recommends that financial institutions begin with broad awareness and a cryptographic inventory, instead of waiting for a final deadline or a confirmed quantum threat.
Related: Data Analytics in BFSI Regulatory Reporting | Scalence
Navigating Data Security: Strategies for Quantum Readiness in BFSI
Getting ready for post-quantum cryptography starts with two main questions: When should you begin mitigation, and which systems and information should you protect first?
The answer depends on how long your data needs to stay confidential and how long your systems will be in use. Data shelf life is the period during which information must remain private. The system life cycle is the period during which applications, platforms, certificates, hardware, and vendor relationships are active.
In BFSI, there are mainly 6 types of data available, and you need to review each type of data separately:
- Transactional data: Payment records, account activity, and settlement information may require long-term protection because they can reveal financial behavior and support fraud.
- Marketing and sales data: This type of data often has a shorter confidentiality period, although customer profiles and segmentation data can still create privacy and competitive risks.
- Risk management data: This type of data, including credit models, fraud indicators, stress tests, and exposure reports, has been commercially sensitive for years. So, you need to secure this data from security threats.
- Audit and compliance data: Records used to demonstrate regulatory compliance may need to remain reliable and confidential throughout their retention period.
- Strategic and business data: M&A plans, product roadmaps, pricing strategies, and board materials can lose significant value if exposed too early.
Once you identify each data type in your system, you need to connect each data category to the systems that create, send, store, and archive it. Here, you need to ensure you include cloud services, third-party platforms, APIs, backup systems, digital certificates, and partners.
This process often shows a common problem: you might know where your important data is, but not all the ways it is encrypted. Without this knowledge, you cannot accurately estimate migration costs or find out where a pilot project would be most valuable.
Related: Secure Cloud Landing Zones for Banking | Scalence
What BFSI leaders should do in 2026
Going forward, BFSI leaders should handle data responsibly throughout its lifecycle. Doing so will help you maintain customer trust, comply with regulations, and mitigate security risks.
For reference, here are three approaches leaders can use to handle quantum security threats effectively.
1. Migrate to PQC (Post-quantum cryptography) Solutions
This approach is suitable for high-value systems that require long-term confidentiality or support critical external connections. However, replacing all systems at once may lead to interoperability issues, operational disruptions, and unnecessary costs.
Challenges:
- High cost
- Limited rigorous testing against future quantum computers
- Need more computing power
- Higher latency requirement
Note: It is highly advisable to choose a mix of traditional and PQC solutions.
2. Retrofit Existing Systems with PQC
Some data types, like transactional, regulatory compliance, financial statements, and risk assessment reports, are best suitable for retrofitting with PQC. Because such data carries a moderate risk assessment and often has a defined shelf life, it is flexible to implement PQC solutions later. Therefore, you need to start preparing your data now.
Challenges:
While this may seem less disruptive, it poses significant planning risks. Many financial systems have lengthy procurement and development cycles. Waiting until migration is mandatory may force you to replace legacy platforms under tight deadlines, with limited testing.
Related: Build Regulatory Guardrails Into Infrastructure | Scalence
3. Strengthening Traditional Encryption Protocols
Marketing data and symmetric keys hold lower risk assessments and shorter shelf life. Therefore, you can rely on traditional encryption protocols while strengthening their prowess. Doing so will help you manage your resources effectively.
However, you should always implement traditional mitigation strategies, such as extending asymmetric key lengths and utilizing symmetric cryptography where feasible. Doing so will allow you to stay ahead of the initial versions of quantum computers.
Challenges:
- Cost of modern encryption models
- Not future-ready
When discussing all three approaches, it is important to consider the costs involved. You should always balance the costs of both security enhancements and security breaches. The best way is to identify the shelf life, relevancy and value of existing data you have. It will help you priortize the security measures to be taken.
Conclusion
Quantum-safe security is a long-term business that requires continuous effort. As long as security threats evolve, you need to adopt new encryption algorithms to protect your data. There is no one-stop solution to eradicate all the security threats that quantum computers pose or will pose.
At Scalence, we recommend starting with a key data flow or business process, defining the specific risk you want to address, and using what you learn to guide a larger migration plan. The aim is to give decision-makers useful evidence, not just more strategy documents.
Need to know more? Contact our data and security experts.
FAQs
Which types of BFSI data are most at risk of quantum attacks?
Data that must stay confidential for years—such as payment records, credit models, compliance archives, and strategic plans—carries for the highest quantum risk. Marketing and short-lived data is a lower priority but still needs protection as part of an overall security strategy.
Should we replace all encryption now, or take a phased approach?
A phased, risk-based approach is best. Start by migrating high-value, long-lived systems to hybrid PQC, then retrofit moderate-risk data during normal upgrade cycles, and strengthen traditional encryption for lower-risk, short-lived data while planning for future upgrades.
What are the main challenges of adopting PQC in BFSI?
PQC algorithms can require more computing power and may increase latency, adding to costs. Many BFSI platforms have long upgrade cycles, and real-world testing of new standards is still ongoing. Third-party vendors and partners must also support PQC to avoid security gaps.
What happens if BFSI institutions delay quantum-safe planning?
Delaying action increases exposure to future data breaches, regulatory scrutiny, and reputational damage. It also forces rushed migrations under tight deadlines, with higher costs and greater risk of operational disruption. Early planning allows for controlled pilots and better budget alignment.
What role do vendors and third-party partners play in quantum readiness?
BFSI institutions depend on many external providers, cloud platforms, payment processors, and core banking vendors. If any part of this ecosystem remains quantum-vulnerable, the entire data flow is at risk. Leaders must demand PQC roadmaps from suppliers and include crypto-agility clauses in contracts to ensure the ecosystem evolves alongside internal efforts.
