The increasing use of artificial intelligence in financial systems is driving the industry towards a model where machines handle transactions on a massive scale, presenting new challenges related to control, oversight, and infrastructure, according to Microsoft and Chainalysis executives. 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 such as latency, scale, and complexity begin to impede a company's ability to compete, prompting firms to reassess their system architecture, he explained at an Alchemy-hosted 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.
"It's no longer about whether technology can automate tasks like executing a hedging strategy – that's already possible. The question now is: can you trust it? Can you audit and control it?" he said.
To facilitate this transition, Microsoft is developing tools, including systems that assign identities and permissions to AI agents and track their actions. In regulated environments, Borden emphasized that firms must demonstrate "what controlled it" and whether a system "followed the policy" when decisions are made without direct human input. Jonathan Levin, co-founder and CEO of Chainalysis, pointed out that the crypto sector already provides a working model of automated finance.
Blockchain networks process vast volumes of transactions through smart contracts and software-driven wallets, creating an environment similar to agent-based systems. "We've been preparing for these moments long before other parts of the financial services industry," Levin said.
This experience 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 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' time will be settled on public infrastructure," while Borden envisioned a more integrated approach linking public blockchains, private networks, and existing payment systems. "I believe traditional payment systems will continue to exist," Borden said, with software acting as the connecting layer between them.