This article first appeared in Digital Edge, The Edge Malaysia Weekly on March 9, 2026 - March 15, 2026

Quantum computing has emerged as a double-edged sword in financial systems, with some experts saying it could unlock significant value for financial services through enhanced fraud detection and risk analysis. Meanwhile, others warn that its immense processing power could one day undermine the encryption that safeguards sensitive data.

Simon Tung, general manager for Asean and AEC at Kaspersky, says quantum computing will not break financial security overnight, but it does challenge the foundations that today’s banking systems rely on.

“Asean’s financial ecosystem is built on mobile-first channels, real-time payments and cloud-based infrastructure, all of which are heavily relying on cryptographic algorithms that could become vulnerable in the future as quantum computing advances,” he says.

Tung says two risks stand out the most for the financial systems, which is the “store now, decrypt later” threat, where encrypted data stolen today could be decrypted in the future once quantum machines become powerful enough. The second risk is vulnerabilities within digital assets and payment-signing systems.

“Blockchains, digital wallets and emerging central bank digital currency pilots use signature schemes that could be forged once quantum machines become powerful enough, raising integrity risks for future financial rails,” he adds.

Quantum computing is a form of advanced processing that solves complex problems within minutes or hours that might take a classical computer thousands of years to complete. While this capability could accelerate scientific research, climate modelling and drug discovery, it also carries the potential to break public-key cryptography, including the security systems underpinning digital tokens such as Bitcoin.

Tung says that at this juncture, it is very unlikely for digital banking or financial system protections to become obsolete overnight once quantum machines reach a certain threshold.

“Digital banking relies on multiple layers of security, not just a single cryptographic standard, and these layers do not fail all at once. The more realistic concern is that quantum computing removes the luxury of time,” he explains.

This is because upgrading cryptography across financial systems takes years, so institutions that delay the migration may find themselves forced into a short, high-pressure window once quantum capabilities accelerate, while early movers phase in new cryptographic standards calmly with far less disruption, he adds.

“Many legacy systems were never designed with crypto-agility in mind. Encryption, certificates and key management are deeply embedded into ageing infrastructures, making migration far more complex than simply swapping algorithms,” says Tung.

To address these challenges, the most practical step is to understand how cryptography is used today. For instance, mapping encrypted data, certificates, authentication mechanisms and systems that rely on public-key algorithms.

Having this visibility would help financial institutions to identify which components will require upgrading as post-quantum standards mature.

Tung says designing new projects with crypto-agility in mind will significantly reduce future transition costs when post-quantum algorithms become standardised and widely supported.

“Organisations should also stay close to the development of post-quantum standards and engage suppliers early. Many core systems depend on third-party software, hardware and cloud services, so understanding vendor roadmaps helps institutions prepare steadily rather than rushing once migration begins across the wider ecosystem,” he adds.

Malaysia is taking its first steps into quantum computing, with the Ministry of Science, Technology and Innovation (Mosti) saying that a national quantum hub is being built to strengthen the development of a quantum-safe ecosystem from the safety and technology governance aspect through Post-Quantum Cryptography (PQC) initiatives.

According to news reports, Minister of Science, Technology and Innovation Chang Lih Kang said a PQC Migration Framework led by CyberSecurity Malaysia is being developed to prepare technical guidelines and transition plans for public and private organisations to adopt quantum-resistant encryption systems aligned with international standards.

These standards are currently being developed by the US-based National Institute of Standards and Technology (NIST), stressing that cybersecurity remains a key prerequisite for quantum computing adoption.

Tung believes Malaysia’s national quantum initiative is a timely step towards building long-term resilience into the country’s digital infrastructure.

“Quantum migration is a multi-year process and incorporating crypto-agility and future quantum standards into the design of the national database and e-government systems allows Malaysia to have a head start, strengthening its defences gradually instead of making disruptive changes later,” he says.

The new quantum centre and initiatives are expected to create opportunities to explore and validate these approaches early, supporting a more secure foundation before quantum threats fully mature.

From a regional stance, Tung says the readiness of Asean’s financial institutions, from major banks to emerging digital banks, to adopt quantum-resistant cryptography is uneven but progressing.

Larger financial institutions with global footprint tend to be more aware of quantum-related risks and some have already begun identifying where public-key cryptography is used across their systems. As for emerging digital banks and fast-growing fintech firms, the priority often remains on near term-fraud and operational risks, he adds.

“The region is moving in the right direction and the overall maturity mirrors the global reality where awareness is rising and pilots are beginning, but meaningful progress will develop over time on continued collaboration among financial institutions, technology providers and policymakers as post-quantum standards evolve,” says Tung.

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