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Quantum technology reshaping Denmark's financial landscape

insight

Quantum technology reshaping Denmark's financial landscape

Quantum technology has become a hot topic in Denmark, further emphasized by the launch of the Danish government’s two-folded National Strategy for Quantum.
This strategy not only aims to support quantum development but also seeks to raise awareness of the application possibilities within sectors such as finance.

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KPMG and Copenhagen Fintech are experiencing a growing interest from the financial sector in quantum technology. Recognizing both the potential and risks, they emphasize the pivotal role of partnerships and collaboration across stakeholders, including the government, academia, and industry, in quantum technology development.

The potential for the use of quantum technology in the financial sector is promising. According to Copenhagen Fintech there is an increase in demand and supply of quantum solutions in the Danish financial sector.

“We have noted expressions of interest from the management level in the Danish banking sector in relation to quantum technology within the last year so our expectation is, that we both will see an increased demand for continuous and executive education to enable internal innovation but also a demand for external consultancy services. We have also noted, that several of the largest Danish technology companies who supplies products and solutions to the financial sector (e.g. BEC, SDC, Trifork and Simcorp) have begun or are offering quantum based solutions as there are mutual interests in securing critical infrastructure."

Kristine Helen Falgren

Head of Fintech R&D at Copenhagen Fintech

The growing interest and demand of quantum based solutions in the financial sector not only reflects a transformative journey in the financial sector, but also introduces a spectrum of new opportunities and security challenges.

“The cybersecurity infrastructure, the confidential communication, on-line banking and crypto assets might incur in some risks, for this reason those are the main areas where we advise our clients in understanding and developing a roadmap, in order to avoid damages both reputational and operational to the working practices. In terms of computational advantage, we see short time opportunities using Quantum Inspired Optimization and Quantum Annealers as well as long term opportunities using Gate Based Quantum Computers, the fields of applications are many, but for now we mainly looked at: Risk Management, Portfolio Optimization, Index Tracking, Credit Score, Internal Logistics. 
Quantum can support solving computational expensive tasks, specifically the ones with a high combinatorial impact. It is important to mention that it is not always straightforward as sometimes it requires a completely new approach and this is the opportunity: to re-think and challenge current work practices with new tools like quantum and GenAI.“

Bent Dalager

Partner and Nordic Head of Newtech at KPMG

Quantum technology will not only impact the traditional Danish banking sector, but also the FinTech sector. Quantum technology can potentially break cryptography and some cryptographic protocols (blockchains) are vulnerable to quantum attacks. Recent incidents, including attacks on non-quantum-resistant cryptocurrencies like Bitcoin and Ethereum, have raised significant concerns among users.

“The incredible power of quantum computers could easily break the encryption our entire digital society is built on. It underlines the importance of projects like CryptQ(Read about CryptQ at the bottom of this article) that take the first steps towards securing our data from hacking in a future that will become reality within the next ten years.”

Bent Dalager

Partner and Nordic Head of Newtech at KMPG

Strong collaboration is key

The CryptQ project

To strengthen the development of quantum based solutions in the financial sector, Danish industries and universities joined forces for the "CryptQ" project. The CryptQ project, initiated in 2022, achieved a significant milestone as researchers from DTU (Technical University of Denmark) successfully transferred data between two of Danske Bank’s computers that simulate data centres.

As a participant in the project, the multinational accounting and services network, KPMG, assumed a dual role by contributing to the quantum-safe data transfer experiment at Danske Bank. KPMG provided valuable financial and technological expertise for the project. The initiative underscores the significance of robust collaboration within the quantum ecosystem, a pivotal aspect that influenced KPMG's active involvement in the project.

"One of the main goal of KPMG is to bridge the gap between academia and industry and in NewTech we aim to bring enlightenment and applications of emerging technology to our clients. Supporting the development of an important piece of hardware as a QKD device while introducing an important client to the benefits of this technology was a good opportunity. Moreover, KPMG DK is the global center of excellence for Quantum Technology for KPMG globally, therefore this project gave us the opportunity to strengthen our SMEs expertise.”

Bent Dalager

Partner and Nordic Head of Newtech at KPMG

KPMG Denmark - A quantum leader

KPMG Global has designated KPMG Denmark as the quantum leader within the organisation and established its quantum hub in Denmark. The hub engages in collaborations with Danish universities and research institutions, focusing on applied quantum technology and expertise in the three primary domains of the second quantum revolution.

Currently, the quantum hub is actively participating in a project with a Danish research university to apply quantum annealing to algorithms pertinent to trading and risk management.

Read more about the KPMG Quantum Hub here

Danish strongholds of Quantum technology & Quantum computing

Want to learn more about the Danish Quantum strategy 2023?

Click to dive into the two-folded Danish National Quantum Strategy.

Quantum Strategy - Part 1

Quantum Strategy - Part 2

Get in touch

Reach out to learn more about how you can be a part of the growing Quantum ecosystem in Denmark

We provide free-of-charge confidential and tailor-made solutions for foreign companies looking to set up a new business in Denmark or expand an existing one. Please contact one of our experts here:

Copenhagen

  • Sarina Lohmann

    Title: Special Advisor – Maritime and transport – Analysis & Partnerships

    Area: Copenhagen

    Phone: +4533920423

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