The increasing use of artificial intelligence in financial systems is driving the industry towards a model where machines handle transactions on a massive scale, posing 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 mounting pressure as transaction demands become more intricate. The tipping point occurs when latency, scale, and complexity start to impact competitiveness, forcing firms to reassess 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 about whether technology can automate tasks, 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, firms must demonstrate what controlled a system and whether it adhered to policies when decisions are made without human input. Jonathan Levin, co-founder and CEO of Chainalysis, said the crypto sector already provides a working model of automated finance, with blockchain networks processing large volumes of transactions through smart contracts and software-driven wallets. This creates an environment similar to agent-based systems.

Levin pointed to efforts to track illicit funds across thousands of wallets 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 10 years, while Borden envisioned a more integrated approach linking public blockchains, private networks, and existing rails. Borden noted that traditional systems will continue to exist, with software acting as the connecting layer.