ADVANCEMENTS IN QUANTUM COMPUTING: IMPLICATIONS FOR CRYPTOGRAPHY AND DATA PROTECTION IN FINANCIAL TRANSACTIONS

Abstract

Quantum computing represents a paradigm shift that poses a profound threat to contemporary financial cryptographic systems. This study investigates the implications of quantum computing on classical encryption mechanisms and evaluates the effectiveness of post-quantum cryptographic solutions for securing financial transactions. Using a mixed-methods experimental approach, the study quantitatively analyzes the vulnerability of widely used cryptographic algorithms, including RSA, elliptic curve cryptography, and AES, under quantum attack models based on Shor’s and Grover’s algorithms. The results demonstrate a drastic reduction in security for asymmetric cryptographic schemes and a significant degradation in symmetric key strength, effectively halving their security margins. Qualitative risk analysis further reveals heightened exposure of financial systems to long-term data breaches, transaction manipulation, and regulatory non-compliance, particularly under “harvest-now, decrypt-later” scenarios. Post-quantum cryptographic schemes, including lattice-based and hash-based methods, are shown to provide robust resistance to quantum attacks while introducing manageable computational overhead. The findings highlight the importance of crypto-agility, hybrid cryptographic deployment, and early migration strategies to mitigate quantum-induced risks. This study concludes that the proactive adoption of quantum-safe cryptography is essential to preserving financial security, operational resilience, and trust in the emerging quantum era.