Quantum-Resistant Cryptographic Mechanisms for AI-Powered IoT Financial Systems

The integration of Artificial Intelligence (AI) in Internet of Things (IoT) financial systems has ushered in a new era of autonomous decision-making, real-time analytics, and dynamic financial interactions. However, the advent of quantum computing presents an imminent threat to the cryptographic foundations of these systems, jeopardizing data confidentiality, transaction integrity, and system authenticity. This paper explores quantum-resistant cryptographic mechanisms—particularly lattice-based, hash-based, and multivariate polynomial cryptography—as viable defenses against quantum attacks on AI-powered IoT financial networks. The study reviews the vulnerabilities introduced by quantum algorithms such as Shor’s and Grover’s, assesses the performance and scalability of post-quantum cryptographic (PQC) protocols in real-world IoT financial deployments, and presents an optimized framework that balances cryptographic strength with computational feasibility. A hybrid security architecture is proposed, integrating PQC with AI-based anomaly detection to ensure end-to-end trust, resilience, and compliance with emerging quantum-secure standards. Through simulations and case-based evaluations, the findings underscore the critical importance of immediate cryptographic transition planning to safeguard future financial infrastructures.