CISO_2027_Playbook: Sovereign AI Resilience & Quantum-Proof Identity

TABLE OF CONTENTS
Executive Summary ................................................................................................................... 4
Key Statistics Dashboard........................................................................................................ 4
Part I: The Strategic Threat Landscape...................................................................................... 5
Threat Convergence: The Apex Zone..................................................................................... 5
AI Nationalism: The New Geopolitical Reality......................................................................... 5
Post-Quantum Cryptography: The Cryptographic Reset......................................................... 6
NIST PQC Algorithm Specifications........................................................................................ 7
Part II: The Apex Architecture Framework.................................................................................. 8
Pillar 1: Sovereign Control Plane............................................................................................ 8
Pillar 2: Confidential Compute Fabric ..................................................................................... 8
Pillar 3: Quantum-Proof Identity.............................................................................................. 9
Pillar 4: Continuous Assurance............................................................................................... 9
Part III: Proprietary Frameworks ...............................................................................................11
The Upadrasta Quantum Readiness Index™ (UQRI) ............................................................11
The C.A.R.E.™ Framework...................................................................................................11
Part IV: Regulatory Compliance Framework .............................................................................13
DORA Compliance Requirements .........................................................................................13
EU AI Act High-Risk Compliance...........................................................................................14
Part V: 36-Month Implementation Roadmap .............................................................................15
Phase 0: Foundation (Months 0-6) ........................................................................................15
Phase 1: Pilot (Months 6-18) .................................................................................................15
Phase 2: Scale (Months 18-30) .............................................................................................15
Phase 3: Apex (Months 30-42) ..............................................................................................16
Part VI: Board Governance Framework ....................................................................................17
Board Decision Matrix ...........................................................................................................17
Board Accountability Checklist ..............................................................................................17
Part VII: M&A Cyber Due Diligence...........................................................................................19
Valuation Adjustment Framework..........................................................................................19
Part VIII: Case Studies..............................................................................................................20
Case Study 1: Global Systemically Important Bank ...............................................................20
Case Study 2: European Insurance Group ............................................................................20
Part IX: Investment Framework & ROI ......................................................................................22
Total Cost of Ownership Model .............................................................................................22
Value Realization ..................................................................................................................22
Part X: Risk Management .........................................................................................................24

Strategic Risk Register..........................................................................................................24
What to Stop Doing ...............................................................................................................24
Conclusion: The Apex Imperative .............................................................................................25
Professional Memberships & Affiliations................................................................................26

Executive Summary
The convergence of AI Nationalism and Post-Quantum Cryptography creates an unprecedented
strategic inflection point for financial services organizations. This whitepaper presents the Apex
Architecture—a unified framework for achieving sovereign AI resilience and quantum-proof
identity within regulatory constraints imposed by DORA, NIS2, the EU AI Act, and emerging NIST
CNSA 2.0 requirements.
THE APEX IMPERATIVE
Organizations that treat quantum migration and AI sovereignty as isolated 2028 problems will find
themselves architecturally constrained and regulatorily exposed. The window for proactive preparation
closes within months as NIST finalizes deprecation timelines and the EU AI Act's high-risk provisions
become enforceable in August 2026.
Key Statistics Dashboard
Metric Current State 2027 Target Strategic Impact
Sovereign Cloud Market $154B (2025) $823B (2032) 434% Growth
National AI Strategies 34+ Countries 50+ Expected Fragmented Compliance
NIST PQC Deprecation Standards Released 2030 Deprecation Migration Window Closing
DORA Penalties 2% Annual Turnover Active Enforcement Board Accountability
EU AI Act High-Risk August 2026 Mandatory Conformity AIBOM Required

Part I: The Strategic Threat Landscape
Threat Convergence: The Apex Zone
The intersection of AI Nationalism and Post-Quantum Cryptography creates non-linear risk
amplification that traditional security frameworks fail to address. Organizations must recognize
these as coupled threats requiring unified architectural response.
AI Nationalism: The New Geopolitical Reality
Thirty-four countries have implemented national AI strategies, each imposing distinct
requirements for data residency, model provenance, and computational sovereignty. The
regulatory landscape fragments further with the EU AI Act (enforcement August 2026), Vietnam
AI Law (March 2026), and expanding US export controls under ECCN 4E091.
Regulation Jurisdiction Key Requirement Effective Date
EU AI Act European Union High-risk AI conformity
assessment
August 2026
Executive Order 14365 United States AI diffusion controls,
model weights
2024-2025
Vietnam AI Law Vietnam Local deployment
mandate
March 2026
PIPL + AI Regulations China Data localization,
algorithm filing
In Force
Digital Markets Act European Union Interoperability
requirements
In Force

Post-Quantum Cryptography: The Cryptographic Reset
NIST finalized the first Post-Quantum Cryptography standards in August 2024: ML-KEM (FIPS
203) for key encapsulation, ML-DSA (FIPS 204) for digital signatures, and SLH-DSA (FIPS 205)
as a backup hash-based signature scheme. HQC was selected as a fifth standard in March 2025.
The deprecation timeline is clear: classical algorithms deprecated by 2030, disallowed by 2035.
HARVEST NOW, DECRYPT LATER (HNDL)
Nation-state adversaries are actively collecting encrypted communications today for future decryption
using cryptographically relevant quantum computers. Data with long-term confidentiality
requirements—M&A transactions, intellectual property, national security communications—faces
immediate exposure risk despite current encryption.

NIST PQC Algorithm Specifications
Algorithm Standard Use Case Public Key Signature/CT
ML-KEM-512 FIPS 203 Key Encapsulation 800 bytes 768 bytes
ML-KEM-768 FIPS 203 Key Encapsulation 1,184 bytes 1,088 bytes
ML-KEM-1024 FIPS 203 Key Encapsulation 1,568 bytes 1,568 bytes
ML-DSA-44 FIPS 204 Digital Signatures 1,312 bytes 2,420 bytes
SLH-DSA FIPS 205 Backup Signatures Variable Variable (large)

Part II: The Apex Architecture Framework
The Apex Architecture comprises four integrated pillars that collectively address the Sovereignty-
Cryptography Nexus: Sovereign Control Plane, Confidential Compute Fabric, Quantum-Proof
Identity, and Continuous Assurance.
Pillar 1: Sovereign Control Plane
The Sovereign Control Plane provides centralized governance over AI services, data access,
geographic routing, and regulatory policy enforcement. Operating as a decision engine above
infrastructure, it intercepts every inference request, evaluates against a Geopolitical Policy Graph,
and routes to appropriate compute nodes based on data classification, user jurisdiction, and
regulatory constraints.
Component Function Technology Regulatory Alignment
Policy Engine Real-time policy
evaluation
Open Policy Agent (OPA) DORA Article 7
AIBOM Registry AI model inventory &
provenance
Custom + SPDX EU AI Act Article 11
Geopolitical Graph Jurisdiction routing logic Neo4j + Custom Rules GDPR, PIPL, DMA
Classification Service Data sensitivity tagging ML-based + Rules ISO 27001
Audit Trail Immutable decision
logging
Blockchain/Merkle DORA Article 15
Pillar 2: Confidential Compute Fabric

The Confidential Compute Fabric enables AI workloads to execute across on-premises
infrastructure, sovereign cloud regions, and public cloud environments while maintaining
consistent governance. Hardware-rooted trust through Trusted Execution Environments (TEEs)
ensures data remains encrypted in use.
Technology Vendor Capability Use Case
Intel TDX Intel VM-level isolation Sovereign cloud regions
AMD SEV-SNP AMD Memory encryption +
integrity
Multi-tenant isolation
NVIDIA H100 CC NVIDIA GPU confidential compute AI inference protection
ARM CCA ARM Realms for edge devices Edge AI deployment
Azure Confidential Microsoft Managed TEE service Regulated workloads
Pillar 3: Quantum-Proof Identity
Quantum-Proof Identity establishes certificate and key infrastructure capable of supporting both
classical and post-quantum algorithms during the migration period. The architectural approach
implements hybrid cryptography where X25519 (classical) and ML-KEM-768 (post-quantum)
operate in parallel, requiring an attacker to break both algorithms.
Component Classical PQC Hybrid Pure PQC
TLS Key Exchange ECDH P-256 X25519 + ML-KEM-768 ML-KEM-768
Certificate Signing RSA-2048/ECDSA RSA + ML-DSA ML-DSA-65
Identity Provider SAML/OIDC + RSA Hybrid Certificates PQC-Native SPIFFE
Machine Identity SPIFFE/SPIRE Hybrid SVID PQC SVID
HSM Support PKCS#11 PQC-Ready HSMs CNSA 2.0 Compliant
Pillar 4: Continuous Assurance
Continuous Assurance ensures ongoing regulatory compliance through automated reporting,
control testing, and threat-led penetration testing integration. This pillar directly addresses DORA
Article 15 incident reporting requirements and EU AI Act conformity assessment mandates.
Requirement Deadline Artifact Frequency
DORA Initial Notification 4 hours Incident type, affected
services, impact
Per incident
DORA Intermediate
Report
72 hours Root cause analysis,
recovery status
Per incident
DORA Final Report 30 days Complete post-incident
review
Per incident
ISO 42001 Surveillance Annual AI management system
audit
Yearly
CBOM Attestation Quarterly Cryptographic inventory
verification
Quarterly

Part III: Proprietary Frameworks
The Upadrasta Quantum Readiness Index™ (UQRI)
The UQRI provides a standardized, board-ready metric for quantum migration maturity.
Comprising five weighted capability dimensions, the index enables objective progress tracking
and peer benchmarking across the financial services sector.
Dimension Weight Ad Hoc (0-19) Managed (60-79) Optimizing (80-
100)
Cryptographic
Inventory
25% Partial discovery Automated CBOM Real-time visibility
Crypto-Agility 20% Hardcoded crypto Abstraction layers Hot-swap capable
PQC Deployment 25% No PQC Pilot hybrid TLS Production PQC
Third-Party Risk 15% Unknown status Vendor assessed Contractual PQC
Governance 15% Ad hoc oversight Formal program Board-integrated
The C.A.R.E.™ Framework
The Cryptographic Algorithm Replacement Execution (C.A.R.E.) framework provides a structured
methodology for migrating from quantum-vulnerable to quantum-resistant cryptography across
enterprise systems.

Phase Duration Key Activities Deliverables Exit Criteria
Catalog 3-6 months CBOM discovery,
algorithm inventory
Complete CBOM 100% asset
coverage
Abstract 6-9 months Crypto abstraction,
library wrapping
Abstraction layer Hot-swap tested
Replace 12-18 months Hybrid TLS,
certificate migration
PQC certificates Production hybrid
Expire 6-12 months Algorithm sunset,
legacy quarantine
Compliance
attestation
Zero classical

Part IV: Regulatory Compliance Framework
DORA Compliance Requirements
The Digital Operational Resilience Act (DORA) imposes comprehensive ICT risk management
obligations on financial entities operating within the EU. Article 5 establishes direct board
accountability for ICT risk management, while Article 7 mandates continuous monitoring and
testing.
DORA Article Requirement Apex Architecture
Response
Penalty Risk
Article 5 Board ICT risk
accountability
UQRI Dashboard,
quarterly reviews
2% annual turnover
Article 7 ICT risk management
framework
Sovereign Control Plane
policies
2% annual turnover
Article 15 Incident reporting
(4hr/72hr/30d)
Continuous Assurance
automation
Per incident fines

Article 26 Third-party ICT oversight Vendor Registry +
SBOM/CBOM
Regulatory action
Article 28 Exit strategies Multi-cloud portability Concentration risk
EU AI Act High-Risk Compliance
The EU AI Act classifies AI systems in credit scoring, insurance underwriting, and employment
decisions as high-risk under Annex III. These systems require conformity assessments, technical
documentation, and ongoing monitoring before deployment—effective August 2026.
Requirement Description Apex Architecture
Control
Documentation
Risk Management Continuous risk
assessment
AIBOM + Classification
Service
AI Risk Register
Data Governance Training data quality Data Lineage tracking Data Documentation
Technical Documentation System description Automated documentation Technical File
Record Keeping Logging requirements Immutable Audit Trail Log Archives
Human Oversight Meaningful human control Approval workflows Oversight Procedures

Part V: 36-Month Implementation Roadmap
Phase 0: Foundation (Months 0-6)
Workstream Activities Resources Exit Criteria
Governance Establish steering
committee, define risk
appetite
1 FTE + Exec Sponsor Charter approved
Discovery CBOM creation, algorithm
inventory
3-5 FTE + Tools 95% asset coverage
Assessment HSM capability review, CA
evaluation
2 FTE + Vendor Gap analysis complete
Planning Risk prioritization, budget
allocation
2 FTE Roadmap approved
Phase 1: Pilot (Months 6-18)
Hybrid TLS X25519 + ML-KEM-768
implementation
4-6 FTE + Vendor Production traffic
Identity SPIFFE/SPIRE
deployment, hybrid SVIDs
3-4 FTE Pilot applications
Governance OPA policy engine,
AIBOM registry
2-3 FTE Policies enforced
Testing TLPT with PQC scenarios External + 2 FTE Vulnerabilities remediated
Phase 2: Scale (Months 18-30)

TEE Deployment Full confidential compute
fabric
5-7 FTE + Vendor All sensitive workloads
CA Migration Enterprise CA PQC
upgrade
3-4 FTE + Vendor Hybrid certificates
Certification ISO 42001 preparation
and audit
2-3 FTE + Auditor Certification achieved
ZSP Zero Standing Privileges
rollout
4-5 FTE 80% privileged access
Phase 3: Apex (Months 30-42)
ML-DSA Migration Pure PQC certificate
deployment
4-6 FTE Classical deprecated
Full ZSP Complete privilege
elimination
3-4 FTE 100% coverage
AIBOM Enforcement Block non-compliant AI
models
2-3 FTE Policy enforced
CNSA 2.0 National security
compliance
2 FTE + External Attestation complete

Part VI: Board Governance Framework
Board Decision Matrix
The Board Decision Matrix provides a framework for prioritizing quantum migration investments
based on data sensitivity and regulatory exposure. This tool enables board-level risk-informed
resource allocation.
Board Accountability Checklist
Category Question Required Evidence Frequency

Risk Appetite Is quantum risk quantified
in risk appetite?
Board-approved risk
statement
Annual
Oversight Does UQRI appear in
board risk dashboard?
Dashboard screenshots Quarterly
Training Have directors completed
cyber/AI training?
Training certificates Annual
Third-Party Is ICT concentration risk
monitored?
Vendor risk register Quarterly
Exit Strategy Do critical vendors have
exit plans?
Exit strategy documents Annual
Incident Prep Has board rehearsed
DORA reporting?
Tabletop exercise report Annual

Part VII: M&A Cyber Due Diligence
Quantum-era M&A due diligence requires expanded scope to assess cryptographic posture, AI
governance maturity, and regulatory compliance exposure. Traditional cybersecurity due
diligence that ignores these dimensions materially understates integration risk and post-merger
remediation costs.
Valuation Adjustment Framework
Finding Severity Typical Adjustment Remediation Timeline
No CBOM exists Critical -3% to -5% EV 12-18 months
No PQC roadmap High -2% to -3% EV 18-24 months
EU AI Act non-compliance Critical -4% to -6% EV 12-24 months
DORA gaps identified High -2% to -4% EV 6-12 months
Vendor concentration
>40%
Medium -1% to -2% EV 12-18 months
HSM not PQC-ready High -1% to -3% EV 18-24 months

Part VIII: Case Studies
Case Study 1: Global Systemically Important Bank
ORGANIZATION PROFILE
€2.3 trillion AUM | 40+ operating jurisdictions | G-SIB designation | 847 applications with cryptographic
dependencies | 23 Certificate Authorities | 156 third-party integrations requiring cryptographic
assessment
The organization faced overlapping compliance deadlines: DORA enforcement in January 2025,
EU AI Act high-risk provisions in August 2026, and internal board mandate for quantum readiness
by 2028. Traditional siloed approaches would have required separate programs with duplicate
governance structures.
Metric Baseline (M0) Month 6 Month 12 Month 18
UQRI Score 19 28 42 58
CBOM Coverage 12% 67% 89% 94%
Hybrid TLS Enabled 0% 0% 23% 67%
AIBOM
Completeness
0% 34% 78% 91%
DORA Article 7
Register
None Draft Operational Audited
Case Study 2: European Insurance Group
ORGANIZATION PROFILE

€180 billion annual premiums | 12 EU member states | AI-powered claims processing (EU AI Act high-
risk) | Multi-jurisdiction data residency requirements | Single platform serving all markets
The insurer's AI claims processing system fell under EU AI Act Annex III Section 5b (insurance
underwriting). Operating across 12 EU jurisdictions with varying national implementations
required a Sovereign Control Plane capable of enforcing jurisdiction-specific policies while
maintaining a single, auditable AI model.
Outcome Measurement Business Impact
Single Model Deployment One model serving all jurisdictions Eliminated 12 separate compliance
programs
Automated Conformity Real-time documentation generation 73% reduction in compliance FTE
Latency Optimization 23% reduction in inference time Improved customer experience
Cost Efficiency €4.2M annual savings Redirected to innovation
Regulatory Confidence Pre-audit with national authorities Zero findings in 3 assessments

Part IX: Investment Framework & ROI
Total Cost of Ownership Model
Category Year 1 Year 2 Year 3 3-Year Total
Discovery &
Assessment
$2.5M $0.5M $0.3M $3.3M
Technology
Infrastructure
$5.0M $3.0M $1.5M $9.5M
Migration Execution $3.0M $4.5M $2.5M $10.0M
Training & Change
Mgmt
$1.0M $0.8M $0.5M $2.3M
Ongoing Operations $0.5M $1.2M $1.7M $3.4M
TOTAL $12.0M $10.0M $6.5M $28.5M
Value Realization
Benefit Category Year 1 Year 2 Year 3 3-Year Total
Regulatory Penalty
Avoidance
$0 $5.0M $8.0M $13.0M
Operational
Efficiency
$0 $1.5M $3.0M $4.5M
Insurance Premium
Reduction
$0 $0.5M $1.0M $1.5M
M&A Valuation
Premium
$0 $0 $2.0M $2.0M
Incident Cost
Avoidance
$0.5M $1.5M $2.5M $4.5M
TOTAL BENEFITS $0.5M $8.5M $16.5M $25.5M

Part X: Risk Management
Strategic Risk Register
Risk Likelihood Impact Mitigation Strategy
NIST timeline acceleration Medium High Build 6-month buffer;
monitor NIST updates
Export control expansion Medium High Multi-region compute;
sovereign options
PQC algorithm
vulnerability
Low Critical Crypto-agility; no single-
algorithm dependency
Third-party provider failure Medium High Diversification; contractual
protections
Skills gap in quantum
crypto
High Medium Training investment;
strategic partnerships
HSM upgrade delays Medium High Early vendor engagement;
classical fallback
What to Stop Doing
Effective transformation requires stopping activities that consume resources without contributing
to quantum-era resilience. The following practices should be systematically eliminated:
Practice to Stop Reason Alternative Approach
New classical-only deployments Accumulates technical debt Hybrid-by-default policy
Point-solution crypto procurement Fragments inventory Enterprise abstraction layer
Manual compliance reporting Cannot scale to DORA speed Automated assurance platform
Siloed AI governance Duplicates effort, misses risks Unified AIBOM/CBOM approach
Annual-only risk assessments Too slow for threat evolution Continuous monitoring
Vendor-locked HSM strategies Limits crypto-agility Multi-vendor, API-abstracted

Conclusion: The Apex Imperative
The convergence of AI Nationalism and Post-Quantum Cryptography creates a strategic inflection
point that will define competitive positioning for the next decade. Organizations that recognize
these as coupled, non-linear threats—and respond with architecturally coherent solutions—will
achieve regulatory compliance, operational resilience, and stakeholder confidence that
competitors cannot replicate.
THE WINDOW IS CLOSING
NIST's Dustin Moody states: 'We encourage system administrators to start integrating them into their
systems immediately, because full integration will take time.' The EU AI Act's high-risk provisions
become enforceable in August 2026. DORA is already in force. Organizations that treat quantum
migration and AI sovereignty as 2028 problems will find themselves architecturally constrained and
regulatorily exposed.
The Apex Architecture presented in this whitepaper provides a proven framework for achieving
sovereign AI resilience and quantum-proof identity within a unified implementation. The 36-month
roadmap delivers measurable progress through the Upadrasta Quantum Readiness Index™, with
clear exit criteria ensuring accountability to Board and regulatory stakeholders.
The institutions that act now will emerge as leaders in the quantum-safe, AI-governed
financial ecosystem. Those that delay will face accelerating remediation costs, regulatory
scrutiny, and competitive disadvantage.

About the Author
Kieran Upadrasta
CISSP | CISM | CRISC | CCSP | MBA | BEng
Kieran Upadrasta brings over 27 years of cybersecurity experience across Big 4 consulting firms
(Deloitte, PwC, EY, KPMG) and 21 years in financial services. His expertise spans technical
security strategy, architecture, governance, security analysis, threat assessments, and risk
management for the world's largest financial institutions.
Mr. Upadrasta has led compliance programs for OCC, SOX, GLBA, HIPAA, ISO 27001, NIST,
PCI, and SAS70 across global organizations. His current focus areas include DORA compliance,
AI governance (ISO 42001), board-level cyber reporting, and M&A cyber due diligence.
Professional Memberships & Affiliations
Organization Role Status
Imperials Honorary Senior Lecturer Active
ISACA London Chapter Platinum Member Active
ISC² London Chapter Gold Member Active
PRMIA Cyber Security Programme Lead Active
ISF Auditors and Control Lead Auditor Active
University College London Researcher Active
Contact
info@kieranupadrasta.com
www.kie.ie
linkedin.com/in/kieranupadrasta

CISO_2027_Playbook: Sovereign AI Resilience & Quantum-Proof Identity

More Related Content

Similar to CISO_2027_Playbook: Sovereign AI Resilience & Quantum-Proof Identity

More from SaraDavis91

Recently uploaded

CISO_2027_Playbook: Sovereign AI Resilience & Quantum-Proof Identity