Microsoft says legacy banks are hitting a breaking point as AI takes over the heavy lifting

Microsoft and Chainalysis executives warned that AI-driven, machine-executed transactions are pushing legacy banks to a “breaking point,” forcing an overhaul of core infrastructure to prioritize machine identity, auditing and trust. Microsoft’s Bill Borden said firms will need systems that assign identities and permissions to AI agents and provide auditable controls; Chainalysis CEO Jonathan Levin said the crypto sector’s experience with smart contracts and wallet monitoring offers a template. Both expect a hybrid future where traditional payment rails, private networks and public blockchains coexist, with software linking them — a shift that could favor cloud and compliance vendors, blockchain tooling and firms offering identity/audit solutions while pressuring legacy processors and banking infrastructure providers.