Homomorphic Encryption: What Businesses Need to Know

As quantum computing advances, traditional encryption methods face potential vulnerabilities. Post-Quantum Cryptography (PCQ) is a field dedicated to developing encryption techniques resistant to quantum attacks. Homomorphic Encryption (HE) is one of the promising methods that could ensure long-term data security in a quantum-dominated future. The U.S. National Institute of Standards and Technology (NIST) and many other leading institutions have already incorporated PQC into their security frameworks, urging organizations to phase out legacy cryptographic protocols in anticipation of quantum-powered decryption techniques. 

What is Homomorphic Encryption? 

Homomorphic Encryption is a cryptographic method that allows mathematical operations on encrypted data, producing an encrypted result that, when decrypted, matches the outcome of operations as if they were performed on plaintext data.

Unlike traditional encryption methods, which require decryption before processing (exposing data to potential breaches), HE maintains encryption throughout the entire process. 

Types of Homomorphic Encryption 

1. Partially Homomorphic Encryption (PHE) – Supports either addition or multiplication on encrypted data but not both.
2. Somewhat Homomorphic Encryption (SHE) – Allows limited operations (both addition and multiplication) before the encryption becomes too complex.
3. Fully Homomorphic Encryption (FHE) – The most advanced form, enabling unlimited operations on encrypted data without decryption.

The most widely used types today are PHE and SHE, while FHE is rarely employed due to its high resource requirements. 

Why Businesses Need Homomorphic Encryption 

1. Privacy Protection & Compliance  

With global regulations like GDPR, CCPA, and HIPAA, businesses must ensure the confidentiality of personal and financial data. HE enables organizations to process encrypted customer information without exposing raw data, helping them meet compliance standards effortlessly. 

2. Secure Cloud Computing & Outsourcing  

Cloud adoption is growing, but concerns over data security persist. Homomorphic Encryption ensures cloud providers and third-party vendors never see unencrypted data, reducing the risk of unauthorized access or breaches. Most dark web attacks stem from inadequately secured cloud computing environments, making HE essential. 

3. Fraud Detection & AI-Driven Insights  

Banks, insurance firms, and healthcare providers can run AI algorithms on encrypted datasets for fraud detection, risk analysis, and medical research—without compromising personally identifiable information. 

4. Protection Against Insider Threats  

Even privileged employees cannot access decrypted data, reducing risk of internal data leaks and cyber espionage.

5. Safe Data Sharing Across Organizations 

Companies can collaborate on shared datasets (e.g., healthcare research, financial analysis) while maintaining encryption, ensuring data confidentiality across industries. 

Challenges of Homomorphic Encryption 

• Performance Overhead– HE is computationally intensive and can be slower than traditional encryption.
• Implementation Complexity – Integrating HE requires specialized expertise in cryptography and substantial computing resources.
• Limited Commercial Adoption – While promising, widespread enterprise adoption is still evolving.

Advancements in computing power, optimized algorithms, and hardware acceleration are making HE more practical. Industries such as finance, healthcare, and cloud computing are leading the way in its adoption. As data security demands continue to grow, these sectors are exploring HE’s potential to process sensitive information securely without compromising privacy or performance. 

Top 5 must-ask questions for businesses 

1. Is Our Encryption Ready for Quantum Attacks? 

• Traditional encryption, like RSA and ECC, is vulnerable to quantum threats. With quantum computing on the horizon, businesses need to ask: is our encryption quantum-resistant? Explore Post-Quantum Cryptography (PQC) to future-proof your security and stay ahead of the quantum curve. 

2. How Can Homomorphic Encryption Protect Our Data in Use? 

• Homomorphic Encryption allows you to perform calculations on encrypted data without ever decrypting it. For businesses managing sensitive data, this enables secure processing and analysis without exposition. Could HE be your secret weapon for securing cloud-based data and third-party services? 

3. How Do We Integrate PQC and HE Without Disrupting Operations? 

• Implementing PQC and Homomorphic Encryption may seem daunting, but the payoff is huge. The real question is: how can we seamlessly integrate these technologies into our existing infrastructure without slowing down performance? Efficient deployment is key to maximizing their benefits. 

4. What Are the Real Costs of Homomorphic Encryption and Post-Quantum Cryptography? 

• PQC and HE are powerful but resource heavy. How will these advanced encryption techniques impact system speed, resources, and costs? Is your business prepared for the computational load? It’s time to evaluate the performance trade-offs and optimize accordingly. 

5. How Do We Stay Ahead of Quantum Cryptography Developments? 

• Quantum-safe encryption isn’t a distant future—it’s happening now. To protect your business, you need a strategy for staying on top of new developments. From PQC standards to Homomorphic Encryption breakthroughs, stay informed and ready for the next big shift in cybersecurity. 

Hitachi Cyber’s Perspective: Staying Ahead of the Curve 

At Hitachi Cyber, we recognize the disruptive potential of both Homomorphic Encryption and post-quantum cryptography. While these technologies are still evolving, we actively monitor advancements to ensure that our clients remain ahead of emerging security challenges. Our approach aligns with industry best practices, leveraging the NIST framework and guidance to develop tailored assessment and remediation strategies for customer-specific cybersecurity needs. Additionally, we integrate these insights into our governance framework to enhance overall resilience. 

With the quantum threat becoming more tangible and regulatory deadlines approaching, organizations must take proactive steps to evaluate and strengthen their encryption strategies. The future of cybersecurity hinges on a balanced adoption of emerging encryption technologies, ensuring that security postures remain robust in an AI- and quantum-driven world. 

For enterprises navigating this transition, now is the time to assess their cryptographic strategies and plan for a post-quantum future—because in cybersecurity, the best defense is preparation. 

Contact us directly on our website for any cybersecurity needs!