Executives from Microsoft and Chainalysis have highlighted how artificial intelligence is transforming financial systems by automating transactions at a large scale, introducing new hurdles in terms of control and oversight. Bill Borden, Microsoft’s corporate vice president for worldwide financial services, emphasized on Tuesday that legacy systems are nearing their limits as transaction complexities increase. He noted that the ‘breaking point’ occurs when latency, scale, and complexity start to hinder competitiveness, necessitating a reevaluation of system architectures. This perspective was shared during an event in New York City hosted by Alchemy.
Borden explained that while automation has long been integral to finance, there is now a shift from merely possessing the capability to ensuring trustworthiness. The critical question, he said, revolves around whether AI systems can be trusted and audited: “It’s not about if technology can automate executing a hedging strategy — it can. Instead, the issue is: can you trust it? Can you audit and control its actions?”
To manage this transition, Microsoft is developing tools that assign identities and permissions to AI agents while tracking their activities. In highly regulated environments, Borden emphasized the necessity for firms to demonstrate accountability by showing “what controlled it” and confirming adherence to policy in automated decision-making processes.
Jonathan Levin, co-founder and CEO of Chainalysis, observed that the crypto sector already exemplifies an automated financial environment. Blockchain networks manage vast transaction volumes through smart contracts and software-based wallets, akin to agent-based systems. According to Levin, “We’ve been preparing for these changes much earlier than other sectors in financial services.”
Levin further highlighted risk management practices within the crypto industry, such as tracking illicit funds across numerous wallets, showcasing the kind of monitoring required in large-scale automated systems.
Both executives foresee a future where diverse systems will coexist. Levin predicted that “the majority of commerce in 10 years will be settled on public infrastructures,” whereas Borden suggested an integrated approach combining public blockchains, private networks, and existing financial channels. Despite the rise of new technologies, Borden believes traditional infrastructure will persist, with software serving as a connector between these various systems.