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 experience growing pressure as transaction demands become more intricate. The turning point occurs when factors like latency, scale, and complexity start to hinder a company's ability to compete, forcing firms to reassess their system architecture, he explained 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. The question is no longer about whether technology can automate tasks like executing a hedging strategy, but rather whether it can be trusted and audited. Microsoft is developing tools to facilitate this transition, including systems that assign identities and permissions to AI agents and track their actions.
In regulated environments, companies must be able to demonstrate what controlled a particular action and whether the system adhered to policies when decisions are made without direct human input, Borden added. Jonathan Levin, co-founder and CEO of Chainalysis, pointed out that the cryptocurrency sector already provides a functioning model of automated finance.
Blockchain networks process large volumes of transactions through smart contracts and software-driven wallets, creating an environment similar to agent-based systems. Levin noted that the experience gained in the crypto sector extends to risk management, citing 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 intervention. 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 payment rails. Borden stated that traditional payment rails will continue to exist, with software acting as the layer that connects them.