The increasing use of artificial intelligence in financial systems is driving a shift towards a model where machines handle transactions on a massive scale, creating new challenges related to control, oversight, and infrastructure, as noted by Microsoft and Chainalysis executives. 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 occurs 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 Alchemy-hosted event in New York City.
While automation has long been a part of finance, Borden emphasized 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. To manage this transition, Microsoft is developing tools, including systems that assign identities and permissions to AI agents and track their actions.
In regulated environments, firms must demonstrate what controlled a decision and whether the system adhered to policy when decisions are made without direct human input, according to Borden. 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, creating an environment similar to agent-based systems. The experience also extends to risk management, with efforts to track illicit funds across thousands of wallets serving as an example of the kind of monitoring required in a system where transactions occur at scale without direct human input. Looking ahead, both executives anticipate a mix of systems coexisting.
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, according to Borden.