As AI Scales, can Data Security Keep Pace?

A recent AI macro deck from Andreessen & Horowitz has been circulating widely among security and technology leaders. It is a strong piece of work, particularly in how it frames the economics of AI, the scale of hyperscaler investment, and where long-term value is likely to accrue.

What stood out most was not just what the deck stated directly, but what it quietly assumed.

As AI adoption accelerates, there is an implicit belief that the underlying infrastructure will scale alongside it. Especially when it comes to data movement and encryption, many assume this layer will simply keep up. In regulated and high assurance environments, the assumptions underpinning AI and data security at scale are already being tested

AI Changes How Data Moves, Not Just How It Is Processed

One of the clearest signals in the deck is the sheer scale of what is coming. Trillions in AI driven revenue, unprecedented infrastructure spend, and AI embedded across everyday workflows rather than isolated use cases.

What follows from this is often under discussed. AI dramatically increases data in motion.

Not just traffic between users and systems, but continuous machine to machine flows, an increasingly AI driven data in motion pattern. Data moving between data centres, across sovereign and regulatory boundaries, from edge to core to cloud, and between autonomous services acting on each other’s behalf. In many environments, these flows are persistent, high-volume, and increasingly latency sensitive.

This shift matters because most security models were designed for a very different world, one where data movement was more bounded, more predictable, and easier to contain

Where the Friction Starts to Show

In highly regulated sectors such as banking, financial services, government, and critical infrastructure, teams are already feeling the pressure created by AI driven data in motion. These are environments where performance, availability, and security are tightly coupled, and where failures tend to be systemic rather than isolated.

Latency becomes a hard constraint. Encryption overhead is quietly traded off for performance often in ways that are difficult to see from a policy or audit perspective. Compensating controls are layered on top of fragile assumptions. Gaps open up between compliance intent and operational reality.

This does not mean teams are failing at security. It means the system boundaries have moved, and security controls are now operating in places and at scales they were never originally designed for.

As AI scales, the transport layer becomes a critical part of the risk surface. It is also a layer where existing security stacks are being stretched beyond what they were originally designed to handle. For many organisations, this is unfamiliar territory, a layer that was previously assumed to be stable, invisible, or someone else’s problem.

Infrastructure Is Where Durability Lives

One of the strongest themes in the deck is that AI winners will not all be visible applications. A disproportionate amount of long-term value will sit in infrastructure. The layers that are hard to replace, deeply embedded, and quietly assumed.

This is especially true in environments where performance is non-negotiable, compliance is continuous, and failures are systemic rather than local.

In those contexts, encryption cannot be a performance bottleneck, an operational burden, or a future cryptographic risk. It must operate at line rate, behave deterministically, and remain manageable without becoming another system teams need to fight.

Why This Matters Now for Regulated Industries

For sectors like banking, financial services, and insurance, this is not a future concern. It is already present in payments and clearing infrastructure, trading and market data environments, interconnects between regulated entities, and early sovereign and private AI deployments. These environments already operate at scale, under tight latency and availability constraints, and with little tolerance for unpredictable behaviour.

As AI increases both the volume and value of data in motion, the cost of getting this layer wrong compounds quickly, across performance, resilience, and compliance.

If encryption becomes the bottleneck, AI return on investment collapses.

A Closing Thought

The deck making the rounds does an excellent job of explaining why AI investment is accelerating and where economic value is likely to concentrate.

The next question for security and technology leaders is simpler, and harder.

Are the assumptions we are making about data in motion still valid at AI scale?

It is not a question with a single answer. But it is one worth asking early, before performance, security, and compliance start pulling in different directions.

Take a demo of Sitehop SAFE Series today!

To find out more, email info@sitehop.com

Or call us: +44 (0)114 478 2366

Sitehop.

Engineered for speed. Built for the future.

About Melissa Chambers – CEO & Co-Founder, Sitehop

Melissa is the CEO & Co-Founder of Sitehop, and leads the development and scaling of high-speed, post-quantum encryption hardware and securing data-in-motion without compromising performance. With a background in hardware engineering, Melissa specialises in designing, manufacturing, and scaling deep tech products from concept to market.
Passionate about solving complex problems through engineering and advocating for women in STEM, Melissa has seen firsthand the impact of diverse technological perspectives. A proud member of Cyber Runway Ignite and the Women’s Engineering Society, Melissa was honored to be recognised as Startup Magazine’s 2023 Inspirational Woman in Industry and 2024’s Most Inspiring Woman in Cyber, as well as leading Sitehop’s win in the recent ClimbUK Awards with Cyber Security Innovation of the Year 2025.

Encryption is no longer optional in financial services. It is embedded into regulatory expectations, contractual obligations, and customer trust. Every transaction, API call, backup, and interbank connection is expected to be encrypted by default.

Yet as financial networks scale, many organisations are discovering an uncomfortable truth: encryption of financial data, while essential, is quietly becoming a bottleneck. Not because the cryptography is weak, but because the way encryption is implemented across modern financial networks was never designed for sustained scale, volatility, or real-time resilience.

For security leaders, this creates a growing gap between compliant and operationally sound. Encryption meets the letter of regulation, but undermines performance, visibility, and risk management in practice.

Encrypting Financial Data at Scale

Regulation has turned encryption into a baseline requirement across the financial ecosystem. Data must be protected in transit between banks, across cloud environments, and through complex third-party supply chains. As a result, encryption now touches almost every packet moving through financial networks.

This shift matters because scale is not accidental. It is the direct outcome of regulatory mandates, cloud adoption, and open banking architectures.

Where Encryption of Financial Data Breaks Down

In isolation, encryption often performs well. Individual links look healthy. Benchmarks pass. Problems emerge only when encryption is exposed to sustained transaction volumes and market volatility.

At peak load, financial networks start to show symptoms that are easy to misdiagnose:

• Latency and jitter appear only during busy trading windows or payment spikes
• Throughput ceilings emerge under stress rather than in testing
• Packet loss increases subtly, often below alert thresholds

Crucially, these issues are frequently blamed on applications or underlying networks. The encryption layer is assumed to be neutral. In reality, it is often the limiting factor.

Compliance-Driven Encryption vs Operational Reality

Data encryption for banks and financial services has historically been optimised for auditability. Can it be proven that data is encrypted? Are keys managed correctly? Are controls documented?

What is rarely examined is how encryption behaves at runtime.

Frameworks such as DORA and NIS2 emphasise both security and operational resilience. However, they do not explicitly account for encryption-induced performance degradation or loss of network observability. This creates a gap between “audit-ready” encryption and systems that remain resilient under real financial workloads.

The result is unseen performance debt: systems that are compliant on paper, but fragile in practice.

The Hidden Economic and Network Cost

Traditional encryption architectures rarely fail loudly. Instead, they drive cost.

As encrypted traffic scales, financial institutions respond by:

• Overprovisioning bandwidth to compensate for encryption-induced latency
• Deploying additional appliances to maintain throughput
• Adding security tooling to compensate for encrypted blind spots

Encryption efficiency in finance declines as complexity grows. More capacity and more tooling are used to mask architectural penalties rather than remove them.

Hardware-enforced, line-rate encryption changes this equation. Instead of compensating for encryption overhead, it eliminates it by design. Rising infrastructure and tooling costs are not inevitable; they are the result of architectural choices driven by compliance pressure rather than network efficiency.

Core Encryption Practices and Their Limits

Regulators are clear about intent: encrypt everything. The challenge lies in how that intent is realised architecturally.

Cryptography is Rarely the Limiting Factor

In most financial environments, cryptographic strength is not the constraint. Mature algorithms are well understood, trusted, and broadly standardised across the industry.

The dominant constraint is where and how encryption is implemented:

• Inline on firewalls already performing multiple functions
• Embedded into SD-WAN platforms not designed for deterministic performance
• Terminated and re-established multiple times across east–west traffic flows

Architectural placement has a greater impact on performance and resilience than cryptographic choice.

Key Management and Access Control at Scale

As encrypted east–west traffic grows, key management complexity increases non-linearly. Rotation schedules, lifecycle governance, and access controls become operationally heavy.

Over time:

• Key management systems themselves become bottlenecks
• Rotation failures create outage risk
• Operational overhead grows faster than traffic volume

Strong IAM and authentication are table stakes. What changes with scale is visibility. Once traffic is encrypted, behavioural and traffic-level insight is reduced, even as compliance requirements for governance and auditability increase.

This is a structural tension: regulation demands stronger controls, while encryption reduces the operational visibility needed to manage them safely.

Storage, Backup, and Recovery Trade-offs

Encrypting financial data at rest across hybrid and cloud environments is essential. But encryption decisions often overlook recovery dynamics.

Encrypted backups protect data integrity, yet they extend restore times. RTO and RPO impacts surface only during real incidents, when recovery speed matters most. These trade-offs are rarely modelled upfront, but they directly affect operational resilience.

Operational Impact of Encrypted Networks

Supervisors are increasingly focused on how systems behave under stress. Encryption is no longer just a security control; it is an operational risk factor.

Performance and Scalability as First-Order Risks

The real impact of encryption emerges in production. Under sustained and peak workloads, performance, scalability, and determinism are tested simultaneously.

Encryption-induced latency affects:

• Trading performance and price execution
• Payment processing reliability
• Customer experience during peak demand

For latency-sensitive workloads, determinism matters more than raw speed. Hardware-based IPsec operating at full line rate avoids jitter and tail latency. Offloading encryption from firewalls and SD-WAN platforms restores headroom for inspection, routing, and policy enforcement.

This aligns directly with regulatory scrutiny of trading stability, payments reliability, and systemic risk.

Threat Detection and Fraud in Encrypted Environments

Encrypted traffic reduces the fidelity of fraud detection and threat monitoring. Security teams rely more heavily on inference, metadata, and alerts rather than direct observation.

The consequence is slower detection and response. This delay is rarely attributed to encryption, yet it represents a real operational cost in financial environments where seconds matter.

Preparing for What Comes Next

Encryption challenges will intensify, not ease.

Post-Quantum Cryptography and Future Readiness

Post-quantum cryptography encryption introduces additional computational load across existing architectures. For financial services, this is not a distant concern.

Long retention periods for transactional and customer data mean cryptographic decisions made today must withstand future threats. PQC transitions risk amplifying existing performance and complexity problems if built on fragile architectures.

Crypto agility becomes essential. Platforms that support algorithm updates in place reduce the need for disruptive refresh cycles. In this context, agility is a compliance enabler, not a performance optimisation.

Risk Management and Audit Blind Spots

Encryption performance and visibility are rarely modelled as first-class risks. Audits focus on configuration: is encryption present, enabled, documented?

What is harder to evidence is:

• Deterministic performance under stress
• Operational resilience
• Effectiveness of detection and response

Measuring encryption of financial data by outcomes rather than configuration is becoming unavoidable.

Rethinking Encryption for Financial Services Networks

An architectural rethink is underway.

From Cryptographic Control to Network Capability

The real cost of encrypting financial data is paid continuously: in performance, visibility, and operational effort. These costs are structural, not accidental, and they increase as networks scale.

Treating encryption purely as a cryptographic requirement creates false confidence. Security posture looks strong, while operational fragility grows beneath the surface.

What a Different Approach Looks Like

Financial services networks require encryption that preserves determinism, observability, and operational simplicity.

Network-native encryption platforms are designed to deliver:

• Deterministic, line-rate performance
• Centralised control and visibility
• Crypto agility for post-quantum readiness

They demonstrate that strong encryption does not have to come at the expense of speed or resilience. When encryption is treated as a foundational network capability, security, compliance, and future readiness scale together.

Future-proof your encryption security today.
Discover how Sitehop delivers PQC-ready encryption for banking and financial services. Request a demo and see how encryption can protect financial data without becoming the bottleneck.

To find out more, email info@sitehop.com

Or call us: +44 (0)114 478 2366

Sitehop.

Engineered for speed. Built for the future.

We’re proud to announce that Sitehop has raised an additional £7.5 million, led by Northern Gritstone, bringing our total funding to £13.5 million. The round also included continued support from our existing investors, Amadeus Capital Partners, Manta Ray, Mercia Ventures, and NPIF – Mercia Equity Finance, managed by Mercia as part of the first Northern Powerhouse Investment Fund (NPIF).

 

Building UK Sovereign Encryption for a Quantum Future

As cyberattacks grow in scale and sophistication, the risk of quantum-enabled breaches becomes more urgent. Today’s software-based encryption methods create latency and slow data transfers, a critical weakness in performance-sensitive networks.

At Sitehop, we’re solving this with our SAFEseries™ system, which performs encryption in hardware rather than software. This approach enables ultra-low latency, quantum-resilient security, and up to 90% lower energy use compared with conventional systems.

Even in the most demanding environments, like telecoms, our hardware encryption delivers high-speed performance with near-zero impact on network efficiency.

 

Proven and Trusted by Industry Leaders

Founded in Sheffield by Melissa Chambers (CEO) and Ben Harper (CTO), Sitehop is already working with major partners including BT.

We recently completed a successful proof-of-concept trial at BT’s Gemini test facility, a replica of BT’s live network and one of Europe’s most advanced telecoms testing environments. Sitehop is also the first external company ever granted access to Gemini, a facility typically reserved for BT’s internal development teams.

Our technology is now live with a tier-one carrier across five countries, proving its scalability and reliability in real-world deployments.

 

Strengthening the UK’s Sovereign Capability

“Sitehop is proving the critical need for future-proof encryption, demonstrated by our early customer traction globally,” said Melissa Chambers, Co-founder and CEO. “As a Sheffield-founded company, this investment from Northern Gritstone supports our mission to grow and scale in the region and build world-leading sovereign encryption capability right here in the UK, accelerating international expansion while keeping the UK at the forefront of cybersecurity innovation.”

“Our mission has always been to deliver world-class security that is ultra-low latency, hardware-enforced, and resilient against future threats like quantum computing,” added Ben Harper, Co-founder and CTO. “Partnering with Northern Gritstone enables us to accelerate our mission while strengthening the UK’s sovereign capability in critical network security. Their ‘profit with purpose’ ethos resonates strongly with us, creating technology that drives global growth and delivers lasting social and economic value.”

 

Backed by Leading Deeptech Investors

Duncan Johnson, CEO, Northern Gritstone, said: “Our focus is always on ‘profit with purpose’, helping to support visionary companies with strong intellectual property to grow out of the North of England. Sitehop is an example of the incredible deep tech innovation coming out of Sheffield’s innovation cluster, providing game-changing technology to support businesses in future-proofing their cybersecurity protection. We’re delighted to be backing Melissa and Ben in an area as important as cryptography.”

 

Nick Kingsbury, Partner, Amadeus Capital Partners, said: “As data volumes and cyber threats grow, the need for the ultra-high throughput and low latency that Sitehop delivers means that the company is seeing strong demand from customers in many sectors. This funding gives the company the ability to deliver on that demand.”

 

Chris Borrett, Mercia Ventures, said: “Melissa and Ben have addressed a problem that even the biggest tech companies have failed to solve. We believe Sitehop is poised to become a major UK success story, and we are excited to partner with them on this journey.” NPIF and Mercia first invested in Sitehop in 2022.

 

Debbie Sorby, Senior Manager at British Business Bank, said: “Eight years on from the launch of the first Northern Powerhouse Investment Fund, we continue to see the remarkable impact businesses are making on the Northern economy. The Fund was designed to support innovative companies across the region, helping them to grow and thrive. Sitehop is a standout example of this success, now one of the UK’s leading technology businesses.”

Why Secure Network Performance Defines Customer Loyalty

The modern digital economy runs on trust. Whether you’re streaming an encrypted video call or executing high-value transactions, the expectation is simple: fast, seamless, and secure connectivity, all at once. But behind the scenes, telcos are often wrestling with an invisible enemy, the performance trade-offs introduced by encryption.

 

When Encryption Becomes a Bottleneck

As mobile data volumes surge, end-to-end encryption protocols like IPsec have become non-negotiable. They’re the backbone of privacy, compliance, and cyber resilience for telcos and their customers. But encrypting every packet of data takes a heavy toll on legacy security gateways. These older systems struggle to process high volumes of small packets, the kind that dominate real-time traffic like Zoom calls, VoIP, and financial transactions. The result?

• Packet loss, leading to frozen video streams and dropped calls
• Latency spikes, which cause time-sensitive applications to stutter or fail
• Jitter and retransmissions, degrading user experiences and increasing operational costs

For enterprises and consumers alike, these issues are more than technical nuisances. They erode confidence and trust in a brand. A single failed video pitch, delayed payment, or slow market trading insight can be the difference between success and failure.

 

The Loyalty Factor

In today’s always-on world, secure network performance is a customer loyalty and business growth driver. A recent shift in business and consumer behaviour shows that connectivity issues, especially on encrypted services, are among the top reasons for switching providers. People are highly intolerant of downtime or lag, particularly when sensitive data is at stake.

Telcos now face a simple but daunting equation, can they deliver high-speed, low-latency services without compromising on encryption strength? Those that can’t, will see customers migrate to competitors that can.

 

A Call to Modernize

The pressure is on telcos to overhaul their mobile-to-fixed network edge. Modern, high-throughput solutions are capable of handling encryption at speed, ensuring:

• Zero compromise on data security
• Consistent performance for real-time apps
• Smoother digital experiences that build trust

 

The outcome?  Video calls that don’t stutter, transactions that complete instantly, and information at someone’s fingertips at high speed. For businesses, it means operational resilience and fewer headaches. For telcos, it means retaining customers in an era where loyalty is earned by securing performance, not just providing it.

To find out more, request our Telco focused white paper: info@sitehop.com

Sitehop. Engineered for speed.
Built for the future.

Or call us on: +44 (0)114 478 2366

 

 

Data is moving faster and in greater volumes than ever before, and the demands on network infrastructure are at an all-time high. AI is fuelling an explosion of data, while cyber threats grow more sophisticated by the day.

 

By 2025, global data creation is expected to reach 181 zettabytes, up from just 64.2 zettabytes in 2020 (IDC). With AI-driven traffic growing at a staggering rate, AI workloads alone will account for a significant share. Meanwhile, cyber threats continue to escalate, with ransomware attacks increasing and quantum computing threats fast approaching.

 

The problem? The very encryption designed to protect this data is now slowing networks down.

 

Four Trends Reshaping Network Speed & Security

1. AI’s Data Surge – AI models need to process enormous datasets in real time, putting unprecedented pressure on networks, so without high-speed, high-security infrastructure, AI-driven services will struggle with delays, bottlenecks, and security vulnerabilities.
2. Rising Global Cyber Threats – Ransomware, state-sponsored attacks, and cyber espionage are more sophisticated than ever, which means stronger encryption is crucial to safeguarding sensitive data, but traditional methods can slow down network performance.
3. The Race to Quantum-Safe Security – Quantum computing will render many encryption standards obsolete, requiring new cryptographic approaches. Organizations that don’t prepare now risk being exposed to “harvest now, decrypt later” attacks, where encrypted data is stolen today and cracked once quantum technology matures.
4. Demand for Low-Latency Applications – Real-time financial transactions, 5G networks, and remote collaboration all require sub-millisecond latency. Legacy encryption solutions add too much processing overhead, making them unsuitable for modern low-latency use cases.

 

The Trade-Off Nobody Talks About

Right now, many network operators, cloud providers, and data centres are being forced to choose between encryption and speed. The more robust the encryption, the slower the network. To maintain throughput, security risks being dialled back, exposing critical data in motion to risk.

 

Key problems and solutions

1. AI-driven data growth is pushing networks to their limits.
   Invest in high-performance infrastructure that can scale with AI-driven demands. Harness advanced encryption solutions designed to keep up with the demands of high-speed, high-volume data transmission.

2. Encryption is slowing networks down, forcing compromises on security.
   Stop choosing between speed and security, demand solutions that deliver both.
   Plan for hardware-based encryption that secures data in motion without impacting network performance.

3. The post-quantum era will demand even more computing power.
   Start PQC migration planning now to future-proof your network. PQC-ready encryption that ensures long-term security without disrupting existing infrastructure.
4. Speed and security must go hand in hand, not compete.
   Prioritize solutions that eliminate trade-offs, rather than accepting performance losses. Engage partners with purpose-built encryption technology that accelerates security without adding latency.
5. Hardware-first encryption is the only way to achieve both.
   It’s time to move away from software-based encryption that slows data transmission down. Dedicated encryption hardware that delivers scalable, high-speed protection for evolving network demands is a must have.

 

The Future of Network Security Starts Now

The AI-driven data explosion, rising cyber risks, and PQC demands aren’t future problems, they’re here today. Don’t let security be the bottleneck that holds your business back. With the right encryption approach, you can secure your network at speed. Are you ready?

 

Sitehop. Engineered for speed. Built for the future.