From Human Hands to Autonomous Agents and What the Future of Digital Finance Holds

The global financial arena has entered a new era, one where autonomous agents (AI-driven programs capable of making and executing decisions) are handling tasks once reserved for human experts exclusively

As part of this shift from human-centric to agent-driven finance, complex operations such as trading and portfolio management are being automated with unprecedented speed and precision, with the implications of this transition being profound for both everyday retail investors and large institutions.

To this point, across most major equity markets, an estimated 60–75% of their respective trading volumes (as of 2024) are now being handled by algorithms as they can process millions of data points and execute trades in milliseconds, operating quite literally a thousand times faster than any human expert.

The numbers are eye-watering

Retail investors are also increasingly entrusting their money with these so-called robo-advisors, as evidenced by the fact that the assets under management (AUM) with these entities soared from roughly $200 billion in 2018 to over $1.1 trillion last year.

Institutional investors have likewise adapted, with banks and hedge funds now embracing more autonomous AI in everything from trade execution to risk management. In fact, by the end of 2021 alone, about 70% of the U.S. stock market’s daily trade volume was being executed by AI-driven algorithms (a figure that has only continued to climb since)

As expected, early adopters reported improved efficiency and consistency, making one thing clear markets across the globe are becoming more agent-friendly, guided by humans only in certain specialized instances

The result has been a more continuous, optimized deployment of capital, with less friction from human schedules or limitations. Therefore, with each passing year, the line between what an individual investor can achieve as compared to a large firm is blurring rapidly, heralding a more inclusive and efficient financial system.

Autonomous agents in action

From the outside looking in, the emergence of this paradigm has been more evident within the decentralized finance (DeFi) arena than in any other sector. A prime example is Giza’s ARMA offering, a pioneering autonomous financial entity that continuously optimizes stablecoin yields across different lending protocols, essentially acting as a digital portfolio manager for depositors

Since its launch, ARMA has provided a compelling proof of concept for its vision, as in just the first few weeks of its debut, it was able to independently manage over $1.12 million in user assets and generate more than $6.6 million in transaction volume.

Furthermore, as of May 16, ARMA had been able to accrue a total operational volume of $32 million, gather more than $3.1 million in assets under agent (AUA), and lap up nearly 102k autonomous transactions.

All of this was possible because ARMA is able to execute trades and rebalance positions continuously (often hundreds of times a day), with the Giza team noting that their internal backtesting has allowed ARMA’s strategies to outperform any individual lending market by 83% (over a four-month period).

Equally important is the fact that ARMA has functioned without compromising on security or user control. All of its furious transaction activity has been executed in a non-custodial manner, such that even though users deposit funds into smart contracts, they retain complete ownership of their assets as the agent is simply authorized to move those funds within set parameters

To elaborate, by operating within predefined constraints and safety checks, the agent avoids the kind of errors or abuses that might be feared when handing over one’s keys to a machine. For users, this means enjoying the benefits of automatic strategy execution while preserving full sovereignty over their assets.

Bridging complexity and sovereignty with ease

True self-sovereignty can become an empty ideal if the cognitive burden on users is so high that they have to revert to centralized intermediaries for added convenience. In this context, Giza’s answer has been to provide an intelligent agent layer that absorbs complexity while preserving the user’s autonomy

In the firm’s lexicon, this burgeoning paradigm can be referred to as “Xenocognitive Finance,” meaning a financial ecosystem that transcends human cognitive boundaries through agentic automation while keeping users in control

Therefore, as this sector evolves and grows, Giza is positioning itself at its helm, developing an SDK for others to build custom agents. This hints at an approaching Cambrian explosion of automated finance, so the least one can expect is an interesting time ahead.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.