The increasing use of artificial intelligence in financial systems is driving the industry towards a model where machines handle transactions on a massive scale, presenting new challenges related to control, oversight, and infrastructure, according to executives from Microsoft and Chainalysis. Bill Borden, Microsoft's corporate vice president of worldwide financial services, stated that as transaction demands become more complex, legacy systems will face mounting pressure. The turning point occurs when 'latency, scale, and complexity begin to impact a company's ability to compete,' forcing firms to reassess their system architecture, he said at an event hosted by Alchemy in New York City. While automation has long been a part of the finance sector, Borden noted that the focus is now shifting from capability to trust.
'It's no longer about whether technology can automate tasks like executing a hedging strategy – that's already possible. The question now is: can you trust it? Can you audit and control it?' he said.
To manage this transition, Microsoft is developing tools, including systems that assign identities and permissions to AI agents and track their actions. In regulated environments, Borden emphasized that firms must be able to demonstrate 'what controlled it' and whether a system 'followed the policy' when decisions are made without direct human input. Jonathan Levin, co-founder and CEO of Chainalysis, pointed out that the crypto sector already provides a functioning model of automated finance.
Blockchain networks process large volumes of transactions through smart contracts and software-driven wallets, creating an environment similar to agent-based systems. 'We've been preparing for these moments long before other parts of the financial services industry,' Levin said. This experience also extends to risk management.
Levin cited efforts to track illicit funds across 'thousands of different wallets' as an example of the kind of monitoring needed in a system where transactions occur at scale without direct human input. Looking ahead, both executives anticipate a mix of systems coexisting.
Levin predicted that 'the majority of commerce in 10 years will be settled on public infrastructure,' while Borden envisioned a more integrated approach linking public blockchains, private networks, and existing rails. 'I believe traditional rails will continue to exist,' Borden said, with software serving as the layer that connects them.