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 breaking point occurs when latency, scale, and complexity start to impact a company's ability to compete, forcing firms to reassess their system architecture, he said at an event in New York City.

While automation has long been present in finance, Borden noted that the focus has shifted from capability to trust. The question is no longer about technology's ability to automate tasks like executing a hedging strategy, but rather about trust, auditability, and control, he said. 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 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. Blockchain networks process large volumes of transactions through smart contracts and software-driven wallets, creating an environment similar to agent-based systems.

The crypto sector has been preparing for this moment long before other parts of the financial services industry, Levin said. This experience also extends to risk management, with Levin citing efforts to track illicit funds across thousands of wallets as an example of the kind of monitoring required in systems 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 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 connecting layer, Borden said.