The Role of Homomorphic Encryption in Protecting Cloud-Based Financial Transactions

Abstract

In an era where cloud computing has become integral to financial transactions, the protection of sensitive data during processing is paramount. This paper explores the role of Homomorphic Encryption (HE) as a groundbreaking cryptographic technique that allows computations on encrypted data without the need for decryption. We discuss the principles of HE, its advantages over traditional encryption methods, and its applicability in safeguarding cloudbased financial transactions. By enabling secure data processing and preserving privacy, HE facilitates secure transactions while maintaining compliance with regulatory standards such as GDPR and PCI DSS. The paper further examines the performance challenges associated with HE, including computational overhead and latency, and presents potential solutions to enhance its efficiency. Through a comparative analysis of existing encryption methods and case studies highlighting the implementation of HE in real-world financial systems, this study aims to illustrate the transformative potential of Homomorphic Encryption in fostering secure cloud environments for financial operations.