Luigi Federico Signorini: Building a quantum-safe financial system -
what role for authorities and for the private sector?
Speech by Mr Luigi Federico Signorini, Senior Deputy Governor of the Bank of Italy, at
the scientific workshop on implications of quantum technology for the financial sector,
organised by the Bank of Italy, Rome, 24 September 2024.
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Ladies and Gentlemen,
It is my pleasure to open this seminar on the implications of quantum technology for the
financial sector.
Experts agree that we are on the eve of a very significant technological change: one
that will redefine our approach to data and to the tools we use to process them, and
may well revolutionise important, even critical, aspects of the way financial institutions
operate.
Like all significant technological advances, the quantum revolution comes with both
promises and threats. Massively enhanced computational power, algorithms that are far
more efficient than existing ones, and a much stronger base for artificial intelligence,
are expected to offer opportunities for better and cheaper services, but they will also
introduce new challenges, not least for financial stability.
Central banks and financial institutions have often been early adopters of technological
innovations. To preserve trust, institutions should continue to be bold and imaginative,
but at the same time fully aware of the risks. Prudent supervisory guidance is needed to
preserve the stability, security and integrity of the financial system. Our seminar will be
an opportunity to go beyond generalities and explore the most likely concrete
challenges and trade-offs we need to face in the quantum era.
The Bank of Italy has a tradition of actively and rapidly adapting its policies to changes
in the data management landscape. Drawing on our experience, we have long
contributed to the action of the European System of Central Banks. We continue to
work in partnership with academia and in cooperation with national and international
institutions.
The most immediate threat most of us currently perceive concerns the protection of the
integrity and confidentiality of data. We feel that such a threat calls for a coordinated
response, within the G7 and beyond. We shall take the opportunity of this workshop to
share our experiences and ongoing work at the Bank of Italy and to present some
reallife examples of useful and feasible cooperation at the national, European and global
level. We encourage all participants to do the same.
Since Peter Shor demonstrated, in 1994, that a quantum computer could theoretically
solve problems much faster than traditional ones, he has inspired scientists all over the
world to imagine the countless possibilities of this technology, and technologists to look
for ways to actually build a functioning machine based on it. Thirty years on, while we
still lack a fully functional and reliable quantum computer, we seem to be actually
getting closer and closer.
As the cybersecurity threat is serious but there are potential ways to fend it off, we
cannot afford to wait. Implementing quantum-resistant cryptography tools before
quantum computers become practically operational is crucial for data longevity.
Sensitive data that are encrypted using today's technology could be stored now by
malicious agents and decrypted later, once quantum tools become available; upgrading
cryptographic tools as soon as possible is therefore necessary to ensure long-term data
security. This is especially relevant for financial institutions. Their core business is
ultimately based on the ability to create, manage and use sensitive data, and it is not
unlikely that the quantum revolution will hit the financial sector faster and more
intensively than other industries.
Awareness of the need to act is growing. In the spring of this year, the European
Commission published a 'Recommendation on a Coordinated Implementation
Roadmap for the transition to Post-Quantum Cryptography'. In the US, the National
Institute of Standards and Technology (NIST) officially released its first set of finalised
post-quantum cryptography (PQC) algorithms last month. This is a major step forward.
In the G7 Finance Track, the Italian presidency identified quantum computing as one of
the key strategic cyber issues facing us. It may affect multiple policy areas, including
national security, competitiveness, ethics, and skill development.
While solutions to achieve quantum security are starting to become available, there are
factors that can make market players reluctant to adopt them quickly. These include
uncertainty about the actual urgency of the quantum threat, the fact that a common
transition approach has not yet emerged, and the fragmentation of investments,
responsibilities and regulatory frameworks across jurisdictions.
The G7 has launched several technical initiatives to foster coordination among the main
stakeholders. With today's workshop, we aim to engage key experts in G7 countries,
with a view to developing a shared understanding of the most urgent issues, a potential
roadmap to address the transition to quantum resilience and, to the extent possible, an
agreed policy agenda. We are fortunate today to have speakers and attendants from a
wide range of backgrounds: academia, government institutions (including
lawenforcement agencies), central banks, international organisations and the finance
industry. This promises to be an ideal opportunity to exchange views, in that it brings
together a set of distinguished experts with considerably diverse experience. I
encourage all participants to be active, ask questions and share their insights.
Ladies and gentlemen, we are also honoured to have Professor Juan Ignacio Cirac
Sasturain with us today as a keynote speaker. As many of you will know, our speaker is
one of the leading theorists in quantum computation. His contributions range from the
physics of quantum computers to quantum algorithms and quantum information theory.
Many here will be especially interested in his seminal work on quantum cryptography.
Professor Cirac is the Director of the Theory Department at the Max Planck Institute of
quantum optics in Garching bei München, Bavaria, and collaborates with many other
academic institutions. He has received an impressive number of high-level awards,
including the Prince of Asturias Award for Technical and Scientific Research (2006), the
BBVA Frontiers of Knowledge Award (2008), the Benjamin Franklin Medal (2010), the
Wolf Prize in Physics (2013), the Max Planck Medal (2018), and many others; more are
sure to come. The subject of his talk is, very aptly, 'opportunities and challenges of the
next generation's computers'. We are certain that his remarks on today's central issue
will set the stage for a very productive seminar.
Please join me in welcoming Ignacio Cirac to the stage.