The increasing use of artificial intelligence in financial systems is driving the industry toward 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 turning point occurs when factors like latency, scale, and complexity start to hinder a company's ability to compete, forcing firms to reassess how their systems are designed, he explained at an event hosted by Alchemy 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 like executing a hedging strategy, but rather whether it can be trusted and audited. Microsoft is developing tools to manage this 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 system and whether it adhered to policy when decisions are made without direct human input, Borden said. Jonathan Levin, co-founder and CEO of Chainalysis, pointed out that the crypto sector already offers 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. Levin noted that this experience extends to risk management, citing 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 direct human input.
Looking ahead, both executives anticipate a mix of systems to coexist. 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 systems. Traditional systems will continue to exist, with software acting as the layer that connects them, Borden said.