Quantum Opportunities

Quantum Safe Opportunity

The market opportunity for Post-Quantum Cryptography (PQC) Migration over the next three years is substantial. According to a report by Markets and Markets, the PQC market is projected to grow from USD 302.5 million in 2024 to USD 1,887.9 million by 2029, at a compound annual growth rate (CAGR) of 44.2%. This growth is driven by the increasing need for quantum-safe cryptographic solutions to protect sensitive data against future quantum threats.

The PQC market focuses on developing cryptographic systems that are secure against quantum computing threats, which could undermine traditional algorithms like RSA and ECC. Researchers and technology companies are working on quantum-resistant algorithms, such as lattice-based and code-based systems. The rising cybersecurity requirements in various verticals, including government, defense, and BFSI (Banking, Financial Services, and Insurance), are key drivers for the market.

Additionally, the integration of AI/Gen AI with PQC is enhancing security protocols and helping to create quantum-resistant algorithms through data analysis and pattern recognition. This integration is crucial for upcoming cybersecurity initiatives and is expected to drive the demand for PQC migration services.

Quantum Safe and Quantum Computing Cost Avoidance Opportunities driven by Capital Markets Regulatory and Compliance Mandates

In 2025, concerns about risk and regulation will grow as AI-driven financial advice and embedded finance become global. Against this backdrop, financial institutions will need to adopt robust governance to protect customers, and ensure compliance. All the more reason to start your Quantum Safe Assessments to identify where your vulnerabilities lie for your critical digital services. There is the urgency to implement platforms designed with security and compliance at their core, especially with the EU’s AI Act and Digital Operational Resilience Act on the horizon. The EU’s Financial Data Access (FIDA) regulation as a transformative force for fintech. Unlike previous regulations focused solely on payment data, FIDA extends to customer information across loans, mortgages, insurance, and pensions, accelerating the shift toward open finance.

The investment industry is facing several significant regulatory compliance mandates over the next three years. Here are the top three:

1. Increased SEC Rulemaking and Enforcement: The Securities and Exchange Commission (SEC) has been actively pursuing an extensive rulemaking agenda under Chair Gensler. This includes a historic volume of regulatory proposals and heightened enforcement activity. Investment managers need to proactively assess and enhance their compliance programs to adapt to these new and amended rules, including coverage for new alternative asset classes and cryptocurrencies. As such, there will invariably be a focus on encryption migration to Post Quantum Encryption by 2030, as well as improved AML/Fraud solutions covering cryptocurrencies.
2. Financial Stability Oversight Council (FSOC) Designations: The FSOC is focusing on designating new systemically important financial institutions (SIFI). For large investment managers, this designation would bring additional regulatory scrutiny from the Federal Reserve Board of Governors (FRB), which has distinct and more open-ended supervisory processes compared to the SEC12. Therefore, Quantum Safe will become more important as new SIFI’s will be designated, and as existing SIFI’s are “remeasured” Quantum Safe can become a new S&R baseline. In addition, with both new SIFI’s and existing SIFIs, there will be a need for a correlated (Market, Credit, Operational) predictive risk black and gray swan analytics solution (BluLyte as an example).
3. Technology and Business Transformation: Regulatory imperatives are driving investment firms to integrate technology and transform their business models. Leveraging AI and other technologies can help firms comply with regulatory changes while also enhancing their operational efficiency and business processes. As the investment and securities industry moves further into cryptocurrencies and alternative asset classes, new risk and portfolio optimization models will be required as alternatives to existing industry standard approaches such as Monte Carlo.