According to Microsoft and Chainalysis executives, the increasing use of artificial intelligence in financial systems is driving the industry towards a model where machines handle transactions on a large scale, posing new challenges related to control, oversight, and infrastructure. Bill Borden, Microsoft's corporate vice president of worldwide financial services, stated that legacy systems will face mounting pressure as transaction demands become more complex.
He noted that the tipping point occurs when factors like latency, scale, and complexity start to impede a company's ability to compete, forcing firms to reassess their system architecture. Borden emphasized that the focus has shifted from capability to trust in the context of automation in finance. He stated, "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?" 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 stressed that firms must be able to demonstrate what controlled a system and whether it adhered to 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 for automated finance.
He noted that blockchain networks process large volumes of transactions through smart contracts and software-driven wallets, creating an environment similar to agent-based systems. Levin stated, "We've been preparing for these developments long before other parts of the financial services industry." This experience also extends to risk management. Levin cited 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 will be settled on public infrastructure, while Borden envisioned a more integrated approach that links public blockchains, private networks, and existing payment rails. Borden stated, "I believe traditional payment rails will continue to exist, with software serving as the layer that connects them."