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From physics to finance – quantum physicists are in demand in the financial sector

Theis Pilegaard Rasmussen has just defended his Ph.D. in quantum physics, but will not continue his academic career. Instead, he has taken a job at Danske Bank. But why are physicists attractive to the financial sector, and what can they contribute?

By Sune Holst, , 4/4/2024

Can you swap particles for portfolios? Yes, indeed you can. Theis Pilegaard Rasmussen, 27 years old, is a living example of this.

On February 1, he successfully defended his Ph.D. titled 'Directing Nanoscale Light-Matter Interactions with Polaritons in Low-Dimensional Systems.' On March 1, he begins a new career at Danske Bank with the title of Senior Data Scientist. A significant career change. But why is he switching from the laboratories at the elite research center POLIMA at SDU - a Center of Excellence financed by the Danish National Research Foundation - to the streamlined glass facades and polished marble floors at Danske Bank?

"The short answer is family. It's definitely something I've considered carefully. The normal path would be to go abroad in a postdoc position and eventually aim for a professorship, but my partner and I are expecting a child, and in that context, a permanent position fits better," explains Theis Pilegaard Rasmussen.

Another significant part of the explanation is a general interest in the financial market.

"There's a stochastic theory about how the stock market develops. I've always been interested in that and have spent a lot of my free time on it," says Theis Pilegaard Rasmussen.

Interest has always been the driving force
Even though Theis Pilegaard Rasmussen's mother is a math teacher and thus has instilled formulas in him from an early age, it has always been the interest and passion for science that drove him. It's not the first time he's made an unexpected career leap.

"In my bachelor's, I worked with galaxy dynamics and high-energy physics, but a study abroad in Heidelberg opened my eyes to nanophysics, so I went from studying the largest sizes in the universe to diving into the world's smallest components."

High demand for physicists in banking
Theis Pilegaard Rasmussen knows a lot about galaxies and nanophysics, but how does that fit into a world of suits and terms like interest, loans, and credit? Surprisingly well, if you ask Lars Thejls Aagaard, First Vice President for Portfolio Intelligence at Danske Bank, who was the man who hired Theis Pilegaard Rasmussen.

"We actually have quite a few engineers and physicists in my department. The most important thing is that they can calculate and code. When we specifically talk about physicists, my experience is that they are good at understanding complex systems, and it doesn't matter whether it's about heat conduction or options trading," says Lars Thejls Aagaard, adding:

"Even though the famous Black-Scholes equation is primarily associated with the financial markets and options trading, we also know it from physics, especially in relation to diffusion and heat conduction."

Lars Thejls Aagaard emphasizes that the analytical skills, problem-solving abilities, and programming experience that Theis Pilegaard Rasmussen has acquired through his studies and research are highly valued in the financial sector, especially in data analysis and model development.

"For example, we've developed a model where we can simulate a financial crisis and predict how much we would lose in such a crisis, and whether we can afford it. Such a simulation model is not far from those Theis is familiar with from physics. Here his competencies really come into their own."

The alternative to hiring Theis Pilegaard Rasmussen would be to teach someone with a banking education about complex calculation and coding.

"And it's usually an easier path to teach a physicist the necessary banking skills. Many of those we hire don't have a basic knowledge of working in a bank, but they develop that along the way," elaborates Lars Thejls Aagaard.

A Different Pace
But are there no differences at all between researching nanophysics and working in a bank? Yes, plenty!

For example, there's a big difference between working with basic research in the purest sense, and dealing with what can essentially be described as critical societal infrastructure. The banks' models for the country's climate impact can provide important information for you and me if we're going to borrow money for a house located in an area where the water level may rise in the coming years.

But the banking world also operates at a different pace than the academic world, where researchers are only finished with a project when they have the final result and don't operate with a provisional status. But Lars Thejls Aagaard has a solution for that:

"The academic work environment isn't characterized by fixed deadlines in the same way, so there will be different time frames at Danske Bank. Academics are incredibly proud of their research and can feel quite uneasy if they think that what they've produced isn't good enough yet. And that's good. We don't want to take that away from them. Therefore, at Danske Bank, we work with partial versions of various tasks.

Working with partial versions simply means that employees deliver continuously to a set date, but understand that it might be only a partially finished product, which they are allowed to continue working on.

Part of a trend
A career shift from quantum physics to a role in the finance world is not just a picture of Danske Bank's approach to talent recruitment, focusing on finding a diversity of competencies that can contribute to innovation and growth. It also illustrates the vast potential that a scientific education can contain.

A Ph.D. in an academic elite environment like POLIMA at SDU can bring unique skills and perspectives relevant for roles requiring analytical thinking, data analysis, technological insight, and innovative thought.

The transition from physics to finance reflects a broader trend in the labor market, where the boundaries between disciplines are gradually blurred, and employees' ability to step outside their traditional areas of expertise becomes increasingly important.

Editing was completed: 04.04.2024