The integration of artificial intelligence into financial systems is driving a shift 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 breaking point occurs when "latency, scale, and complexity start to impede your ability to compete," forcing companies to reevaluate their system architecture, he said at an event in New York City hosted by Alchemy. Although 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 is: can you trust it?
Can you audit and control it?" he said. Microsoft, which offers AI assistants in many of its products, is developing tools to facilitate this transition, including systems that assign identities and permissions to AI agents and track their actions. In regulated environments, Borden emphasized that companies must be able to demonstrate "what controlled it" and whether a system "adhered to policy" when decisions are made without direct human input.
Jonathan Levin, co-founder and CEO of Chainalysis, pointed out that the cryptocurrency sector already provides a functional model of automated finance. Blockchain networks process large volumes of transactions via smart contracts and software-driven wallets, creating an environment similar to agent-based systems. "We've been preparing for these developments long before other parts of the financial services industry," Levin said.
This experience extends to risk management. Levin cited efforts to track illicit funds across "thousands of different 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 will coexist.
Levin predicted that "the majority of commerce in 10 years will be settled on public infrastructure," while Borden pointed to a more integrated approach combining public blockchains, private networks, and existing payment rails. "I believe traditional payment rails will continue to exist," Borden said, with software serving as the layer that connects them.