Westpac Banking Corp has increased its strategic equity stake in cybersecurity firm QuintessenceLabs, which has developed military-grade encryption technology using quantum physics of light that could withstand hacking by quantum computers.
Canberra-based QuintessenceLabs, which was originally spun out of the Australian National University and is known as QLabs, is also protecting computer systems for the Australian Defence Force and Royal Australian Air Force. Through Westpac – which has exercised an option to increase its 10.8 per cent stake acquired in 2015 to 15.3 per cent – QLabs is planning to roll out its cybersecurity product to global banks.
Westpac chief information officer Dave Curran said the QLabs system will fortify Westpac from potential attacks by quantum computers that will be able to use vastly larger computing power to crack existing encryption techniques used by banks around the world, including the RSA algorithm.
Quantum computer technology, of which Australia is a pioneer, might become available in about a decade.
Using hardware rather than software, QLabs has developed technology using quantum physics of light, which generates true random numbers via laser dispersion.
While RSA works by generating the product of two very large prime numbers, QLabs has developed technology that uses lasers and measures "quantum noise", or the "the crackle in the fabric of space", says QLabs founding director and CEO Vikram Sharma.
"Our random number generator – Australia's technology – is the fastest commercially available true random number generator in the world," Mr Sharma said.
Mr Curran said the technology overcomes problems generating and managing the encryption keys at enterprise scale, because its low latency allows the encryption to be done very quickly on vast amounts of data. Westpac is using it to encrypt data on machines being used outside the bank and information in individual emails.
Military strength
Westpac is also using the technology to secure personal identity data in Westpac Databank, a platform managing security for data exchange start-up Data Republic, in which Westpac's Reinventure venture capital fund has an equity stake.
Former Westpac chief strategy officer Jon Nicholson is QLabs chairman, while Robert Wilson, the chief technology officer at Westpac, is a director.
Westpac has not disclosed the dollar value of its investment in QLabs, which is keeping its valuation confidential for competitive reasons. It is planning to provide its technology to the US and UK military, which protects data gathered in operations because recordings on hardware cannot be accessed if captured by an enemy without the private key.
QLabs also works with NetDocuments, which provides law firms and financial institutions with secure storage in the cloud. Mr Curran said the QLabs technology would assist Westpac should banking data ever be authorised to be storied in the cloud.
As well as providing the random number generator, QLab's main cyber product, known as the Trusted Security Foundation (TSF), which can be connected to existing enterprise systems, conducts encryption key management, implements data security policy and provides a "hardware security module".
"Data security governance is really escalating as an issue for the technical boffins or even CISO [chief information security officers] team to an issue becoming relevant at the board level of most organisations," Mr Sharma said.
"Traditionally, we have put walls around assets and aimed to keep the bad guys out. But what we are increasingly seeing is that while we need to continue doing that, it is insufficient and we need to protect the target of attacks – the data itself."
With the cryptographic hash algorithm known as SHA-1 being phased out as growing computer power makes it less secure, Mr Curran said Westpac wants to step away from the ongoing global battle between companies ramping up the size of their encryption keys only for them to be attacked by hackers accessing more and more computer power.
"We see QLabs as an opportunity to take a massive leapfrog to a new technology approach," he said. "QLabs takes a whole different step rather than chasing the next largest number key, versus the next largest computer trying to break it."
