The integration of artificial intelligence in financial systems is driving a shift towards a model where machines execute transactions on a large scale, presenting 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 mounting pressure as transaction demands become more complex.
The tipping point is reached when factors such as latency, scale, and complexity start to impact a company's ability to compete, forcing firms to reevaluate their system architecture, he said at an event in New York City. While automation has long been a part of the finance sector, Borden emphasized that the focus is now shifting from capability to trust.
The question is no longer about the ability of technology to automate tasks, but rather whether it can be trusted and audited. To facilitate this transition, Microsoft is developing tools to manage AI-driven systems, including those that assign identities and permissions to AI agents and track their actions.
In regulated environments, firms must be able to demonstrate what controlled a system and whether it adhered to policies when decisions are made without human input, according to Borden. Jonathan Levin, co-founder and CEO of Chainalysis, noted that the cryptocurrency sector has already demonstrated a working model of automated finance, with blockchain networks processing large volumes of transactions through smart contracts and software-driven wallets. This creates an environment similar to agent-based systems, he said. Levin also highlighted the experience of the crypto sector in 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 human input.
Looking ahead, both executives expect a mix of systems to coexist, with Levin predicting that the majority of commerce will be settled on public infrastructure in the next decade, while Borden envisions a more integrated approach linking public blockchains, private networks, and existing systems.