Quantum Risk Management

What is Quantum Risk Management?

Quantum Risk Management (QRM) is the discipline of anticipating, identifying, assessing, mitigating, and continuously monitoring the risks and opportunities associated with the development and deployment of quantum technologies. It focuses on their potential impact on an organization’s information assets, operational continuity, compliance obligations, competitive positioning, and long-term resilience.

Quantum advances have the potential to undermine the confidentiality, authenticity, and integrity controls. QRM extends traditional cyber and operational risk frameworks by guiding a controlled, strategic transition to quantum-resilient systems and processes.

A quantum risk management program begins with governance. Boards must formally recognize quantum exposure as a critical strategic risk. This framing drives proper funding, oversight, and reporting. It also enables the organization to demonstrate due care and fiduciary responsibility to regulators, investors, and courts.

While quantum computing introduces profound security and compliance challenges, it also creates strategic opportunity. Proactive quantum planning provides a market differentiation advantage. Enterprises that can demonstrate quantum-safe readiness satisfy due diligence from risk-conscious customers, and reduce friction in mergers or acquisitions where the long-term integrity of records is scrutinized.

Boards that view the transition as an opportunity can transform a compliance-driven program into a trust and reputation asset, signaling technological leadership and long-term stewardship of stakeholder data. In highly regulated sectors, this positioning can translate into competitive strength. Demonstrating that the company can anticipate systemic technological shifts and manage them responsibly builds confidence among regulators, partners, and investors while mitigating future liability and preserving operational continuity.

Once the board acknowledges quantum risk, it should designate accountable owners and define clear reporting lines across several critical functions:

1. Security architecture and cryptographic engineering. It starts with a clear, evidence-based picture of where quantum-vulnerable algorithms are used and how they can be replaced without destabilizing business operations.

For decades, many organizations have approached cryptography as a background utility, not a strategically governed capability. Encryption, digital signatures, and key management were often seen as technical details left to individual development teams or to the vendors of off-the-shelf systems. As a result, cryptographic decisions were made ad hoc, with little enterprise-wide visibility or long-term planning. Over time, this created a fragmented, opaque cryptographic landscape inside most enterprises.

This fragmentation introduces several weaknesses that become acute in the face of the quantum threat.

Without centralized oversight or an accurate cryptographic inventory, the organization simply does not know where vulnerable algorithms are deployed. This ignorance makes it impossible to plan or prioritize a transition to post-quantum cryptography.

Opaque third-party dependencies create supply chain risk. If a vendor’s component fails to adopt PQC, it will undermine the enterprise’s own migration, and the organization may discover the vulnerability only after an incident or regulatory inquiry.

What was once a tolerable lack of discipline, using whatever cryptography just worked, becomes a liability when the organization must migrate all systems before attackers can exploit quantum capabilities.

In very simple words, it is time to pay the price for long-term mismanagement of cryptography.

Security architects play a vital role in testing and validating new post-quantum implementations. They benchmark performance, ensure compatibility with legacy systems, and confirm that security controls continue to function. They must also plan for hybrid deployments, where classical and post-quantum algorithms run side by side during the migration period, and ensure that protocol negotiation cannot be silently downgraded by attackers. This includes updating PKI infrastructure so that it can issue, manage, and revoke post-quantum or hybrid certificates, and ensuring that development pipelines and processes can handle new cryptographic libraries without introducing vulnerabilities.

2. Enterprise risk management (ERM). Security architecture operates at the technical layer. The ERM function provides the governance and oversight framework that ensures the organization treats quantum exposure as a formal enterprise risk, with the same discipline applied to financial, operational, or regulatory risks. It translates the highly technical nature of quantum threats into a risk language understood by boards, auditors, regulators, and investors, ensuring that decisions about investment, prioritization, and disclosure are made in a defensible and well-documented way.

ERM must integrate quantum risk into the enterprise risk register, align it with established risk categories, and make it subject to the same reporting and escalation mechanisms as other material enterprise risks.

ERM must define key risk indicators (KRIs) to measure exposure and progress. The indicators turn an abstract threat into quantifiable metrics that can be tracked. KRIs include the proportion of data that has been migrated to quantum-safe protection, the share of vendors that have provided attested migration plans or post-quantum readiness documentation, and the alignment of implemented controls with recognized standards such as the NIST post-quantum cryptography suite. KRIs monitor budget allocation and milestone completion for the quantum transition program, ensuring the board can see whether the effort is keeping pace with regulatory and technological developments. Well-designed KRIs create a bridge between technical progress and board-level oversight.

The ERM function must ensure that the quantum risk management program aligns with the organization’s risk appetite and with regulatory expectations. Risk appetite statements usually include how much residual exposure the enterprise is willing to tolerate in areas such as information security and compliance. Quantum risk challenges these statements because the potential impact of inaction is enormous, including breach of confidentiality obligations, regulatory penalties, and litigation.

The ERM function must ensure that the technical outputs of security architecture satisfy the legal and compliance requirements identified. ERM must prevent siloed responses, and must ensure that the quantum transition is managed as an enterprise transformation, not a series of isolated technology upgrades. ERM must ensure that the documentation and reporting produced during the program are coherent and traceable. This traceability is critical when demonstrating to regulators or courts that the organization anticipated and addressed a foreseeable risk.

3. Records management and legal. These functions decide which archives, contracts, and regulated records must remain confidential for long. They assess compliance obligations under privacy and operational resilience frameworks and prepare for supervisory reviews.

Risk and security teams identify algorithms and design migrations and governance. Records management and legal functions determine what must be protected, for how long, and to what evidentiary standard. Their work ensures that the quantum risk management program is not a technical exercise, but one that preserves the legal enforceability, confidentiality, and compliance standing of the organization far into the future.

Every organization keeps large volumes of digital records, including contracts, board minutes, financial statements, audit trails, intellectual property filings, due diligence files, medical or customer records, that are stored under retention rules derived from corporate governance requirements, statutory mandates, and litigation risk. Records management teams, together with legal counsel, classify these data assets not only by traditional confidentiality levels but also by their sensitivity horizon. How long must they remain secret, authentic, and legally enforceable?

For example, certain healthcare records may need confidentiality protection for decades. Some trade secrets and research data may underpin competitive advantage for decades. If such materials are encrypted or digitally signed with algorithms that quantum computing could break, their confidentiality or non-repudiation will not survive the full retention period. Identifying these classes early allows the organization to prioritize re-encryption, key rotation, or re-signing with post-quantum methods before adversaries can exploit weaknesses.

These teams also assess compliance obligations under a wide array of regulatory frameworks that impose duties on data confidentiality, integrity, and operational resilience.

For example, privacy laws such as the General Data Protection Regulation in the EU require controllers and processors to apply state-of-the-art security and to anticipate foreseeable risks to personal data. Sector-specific regimes, such as the Digital Operational Resilience Act (DORA) for financial services, or the NIS 2 Directive for essential and important entities, expect cryptographic agility.

Organizations must map each applicable regulatory regime to the organization’s data classes and retention schedules, determine when existing cryptographic protections will cease to meet the standard of care, and document the remediation plan. This may include advising the board to accelerate migrations for certain record types to avoid non-compliance when regulators update their guidance or require post-quantum readiness.

When the organization is a data processor or service provider, contracts must contain security, confidentiality, and retention commitments. If quantum-vulnerable encryption is used today, the organization could face breach of contract claims or indemnification demands if future decryption occurs. Legal counsel must update contract language to include post-quantum readiness obligations, allocate responsibility for timely migration, and require third-party attestation of cryptographic agility. Organizations must include quantum criteria in vendor due diligence questionnaires and service-level agreements, ensuring that suppliers’ cryptographic controls will not undermine the enterprise’s regulatory or contractual obligations.

4. Product engineering. A critical responsibility of this function is to design and maintain cryptographic agility within products and platforms. Many legacy systems hard-code algorithms such as RSA or elliptic curve cryptography deep within their architecture. Required changes include disruptive redesign, expensive recalls, or forced customer upgrades. The organization must migrate from classical to post-quantum cryptography, and adapt again if new standards evolve, without re-engineering entire products. In a world where NIST and other bodies may adjust parameters or select additional algorithms, such agility becomes a competitive and compliance necessity.

Products with long service lives, particularly IoT devices, operational technology (OT), industrial control systems, and embedded medical or automotive components, are often deployed for many years. If these devices cannot be updated to support new cryptographic standards, they may become insecure or non-compliant once quantum attacks become practical. Product engineering must ensure that secure update mechanisms exist, firmware is signed with algorithms that can evolve, and designs are capable of verifying post-quantum signatures.

Digital signatures are critical. Many industries rely on digitally signed code, configurations, and records to prove safety, authenticity, or regulatory compliance. For example, in medical devices, automotive software, aviation systems, and industrial controllers, signed firmware and configuration files can be essential for certification and liability defense. If those signatures are based on quantum-vulnerable algorithms, their evidentiary and compliance value will erode. Technology leaders must plan for dual or hybrid signature schemes during the transition, and coordinate with certification authorities to validate PQC-based signatures.

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A new formal policy is needed.

The policy, approved by the board, must establish:

1. Recognition of quantum risk as a material enterprise-wide risk.

2. Roles and responsibilities.

3. Reporting and escalation mechanisms.

4. Funding and resourcing commitments.

5. Integration into existing frameworks, such as internal audit, operational resilience plans, privacy programs, and third-party risk management.

Quantum migration is a multi-year journey and cannot depend on individual champions alone. This policy is necessary evidence that regulators and courts can examine to determine whether the organization acted responsibly once the risk was foreseeable.

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Exotic risks become mainstream risks.

In the modern computing era, the risks posed by a breakthrough in cryptanalysis were treated as exotic. Quantum computing converts what was once a theoretical capability into a foreseeable enterprise exposure.

1. The temporal asymmetry of the threat. Attackers can (and do) capture encrypted traffic or exfiltrate archives today and defer decryption until adequate quantum capability exists. This exposure is the subject of guidance from national authorities urging enterprises to begin inventory and management.

According to the paper, a successful post-quantum cryptography migration will take time to plan and conduct. CISA, NSA, and NIST urge organizations to begin preparing now by creating quantum-readiness roadmaps, conducting inventories, applying risk assessments and analysis, and engaging vendors. Early planning is necessary as cyber threat actors could be targeting data today that would still require protection in the future (or in other words, has a long secrecy lifetime), using a catch now, break later or harvest now, decrypt later operation.

According to the paper, many of the cryptographic products, protocols, and services used today that rely on public key algorithms (e.g., Rivest-Shamir-Adleman [RSA], Elliptic Curve Diffie-Hellman [ECDH], and Elliptic Curve Digital Signature Algorithm [ECDSA]) will need to be updated, replaced, or significantly altered to employ quantum-resistant PQC algorithms, to protect against this future threat. Organizations are encouraged to proactively prepare for future migration to products implementing the post-quantum cryptographic standards. This includes engaging with vendors around their quantum-readiness roadmap and actively implementing thoughtful, deliberate measures within their organizations to reduce the risks posed by a CRQC.

2. Institutionalization. Once a risk acquires standards, timelines, and supervisory oversight, it stops being exotic by definition. In August 2024, NIST finalized federal standards for post-quantum cryptography, specifying families for key establishment and digital signatures that enterprises can adopt and auditors can measure against.

3. Supervisory direction. The U.S. federal government requires agencies to inventory cryptographic systems and plan migrations, elevating discovery and roadmap management.

Europe is converging on the same posture. Technical agencies and standards bodies have produced migration analyses, protocol integration studies, and planning frameworks that transpose quantum from theory to implementation detail.

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The Quantum Hybrid Risk Era

Hybrid risks are the result of the convergence of multiple threat vectors, including cyber, physical, legal, financial, informational, and geopolitical, into campaigns that are synchronized, mutually reinforcing, and designed to overwhelm linear defenses. Quantum technologies accelerate this convergence by altering the cost, speed, and feasibility of attacks. What was once an exotic cryptographic risk now intersects with supply chains, records integrity, operational resilience.

We expect that quantum will reshape hybrid exposure with the extensive use of forged digital artifacts. In simple terms, a forged digital artifact is any digital object (like a file, message, record, credential, transaction, media asset, log entry), presented as genuine where its authenticity, integrity, provenance, or attribution has been intentionally falsified (by altering content, mislabeling its origin or time, or producing valid-looking cryptographic evidence such as a digital signature, seal, certificate chain, or timestamp). This definition covers classical tampering and modern synthesis.

Adversaries will not only decrypt what we have encrypted before the quantum era. They will develop forged digital artifacts that will look genuine, and they will leak these documents. This attack blends cyber, influence, and legal manipulation. Today, forged digital artifacts can be detected because our public-key cryptography still works. If someone fakes a document or record, an investigator can check whether the signature or timestamp was really issued by the right key at the right time.

Sophisticated adversaries already collect huge volumes of encrypted and signed material, even if they cannot break it now. Once they gain quantum capability, they will revisit that archive, re-sign, backdate, or alter materials and release them as genuine. A forged file will pass every current technical verification test. In a dispute or investigation, the victim would have no cryptographic ground to stand on.

Quantum-enabled forgeries will be weaponized.

It is important to distinguish cryptographic forgery from content forgery, and to recognize how they can be compounded.

Cryptographic forgery is the forgery of an artifact that appears to have been generated or approved by a given principal, and that successfully passes cryptographic verification (signature, seal, certificate chain, or message authentication) without the principal’s authorization or knowledge.

In simple words, it is the false use of a cryptographic proof of authenticity, so that the artifact appears valid under technical verification procedures. The content of the artifact may be true, false, or even entirely copied. What makes it a cryptographic forgery is that the cryptographic evidence itself has been falsified.

From a legal standpoint, cryptographic forgery undermines the presumptions that a secure electronic signature or a qualified electronic seal is attributable to the signer.

Content forgery is any digital object whose substantive content (text, image, data, record, or media) has been fabricated, altered, or misrepresented to create a false factual impression.

In simple words, it is the manipulation of the information itself. Words are changed, images are doctored, logs are edited, data fields are falsified, or an entirely fake document is created.

A falsified contract (content forgery) that is also digitally signed with a quantum-derived key (cryptographic forgery) is exceptionally dangerous. The false content gets inside a trust wrapper that the law presumes genuine.

Hybrid threats involve low cost attacks, while forcing the defender into a response that is expensive, disruptive, or slow. This is exactly the dynamic behind forged digital artifacts in a hybrid context.

A defender faces very high costs to detect and disprove forgeries. Cryptographic verification, which is usually very fast, is no longer trustworthy if the attacker can generate valid signatures. This asymmetry, low cost for the attacker, high cost and delay for the defender, is what turns forgery into a hybrid threat.

The situation resembles small drones flown over airports. For an attacker, a drone is cheap, easy to launch, and hard to trace. For the airport or the state, defending airspace is expensive and operationally disruptive. Flights may be halted, counter-drone systems are costly, legal response is slow.

Similarly, a forged digital artifact is cheap to produce with quantum capabilities that let attackers generate a perfect digital signature. The defender must spend heavily on digital forensics, legal proof, and crisis management. One well-timed forgery can disrupt operations, trigger regulatory investigations, and erode trust just as one small drone can shut down an airport.

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