The increasing use of artificial intelligence in financial systems is driving a shift towards a model where machines execute transactions on a large scale, presenting new challenges related to control, oversight, and infrastructure, according to Microsoft and Chainalysis executives. At an event in New York City, Microsoft's corporate vice president of worldwide financial services, Bill Borden, stated that legacy systems will face growing pressure as transaction demands become more complex. The turning point occurs when factors such as latency, scale, and complexity begin to impact a company's ability to compete, forcing firms to reassess how their systems are built. Borden noted that while automation has long been a part of finance, the focus is now shifting from capability to trust.
The key question is no longer whether technology can automate tasks such as executing a hedging strategy, but rather whether it can be trusted and audited. To address this challenge, Microsoft is developing tools to manage the transition, including systems that assign identities and permissions to AI agents and track their actions. In regulated environments, companies must be able to demonstrate what controlled a particular action and whether the system followed established policies when decisions are made without direct human input. Jonathan Levin, co-founder and CEO of Chainalysis, pointed to the crypto sector as a working 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. According to Levin, the crypto sector has been preparing for the shift towards automated finance for some time. Levin also highlighted the importance of risk management in a system where transactions occur at scale without direct human input. He cited efforts to track illicit funds across thousands of different wallets as an example of the kind of monitoring needed in such a system.
Looking ahead, both executives expect a mix of systems to coexist. Levin predicted that the majority of commerce will be settled on public infrastructure within the next decade, while Borden envisioned a more integrated approach that links public blockchains, private networks, and existing payment rails. Borden noted that traditional payment rails will continue to exist, with software acting as the layer that connects them.