The increasing use of artificial intelligence in financial systems is pushing the industry towards a model where machines handle transactions on a large scale, creating 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 legacy systems will face growing pressure as transaction demands become more complex. The turning point is reached when latency, scale, and complexity begin to impact a company's ability to compete, forcing firms to reevaluate their system architecture, he said at an event in New York City.
While automation has long been a part of finance, Borden noted that the focus is now shifting from capability to trust. The 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 manage this transition, Microsoft is developing tools that assign identities and permissions to AI agents and track their actions.
In regulated environments, companies must be able to demonstrate what controlled a system and whether it followed policy when decisions are made without human input, Borden said. Jonathan Levin, co-founder and CEO of Chainalysis, pointed to the crypto sector as a working model of automated finance, where blockchain networks process large volumes of transactions through smart contracts and software-driven wallets. This creates an environment similar to agent-based systems, he said. The experience of the crypto sector also extends to risk management, with efforts to track illicit funds across thousands of wallets serving as an example of the kind of monitoring needed in a system where transactions occur at scale without human input.
Looking ahead, both executives expect a mix of systems to coexist. Levin predicted that the majority of commerce will be settled on public infrastructure in the next 10 years, while Borden envisioned a more integrated approach that links public blockchains, private networks, and existing systems. Traditional systems will continue to exist, Borden said, with software acting as the connecting layer.