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While MCP offers agent identification, absence of guardrails for communication, lack of audit trail and inability to do KYC on agents to authenticate them present adoption challenges for regulated companies

July 10, 2025 //  by Finnovate

Model Context Protocol (MCP) has begun amassing a large number of users, all but guaranteeing the mass adoption needed to make it an industry standard. While many regulated companies, such as banks, financial institutions, and hospitals, have begun experimenting with AI agents, these are typically internal agents. Regulated companies do have APIs. Still, so much of the integration these companies undertake has taken years of vetting to ensure compliance and safety. However, it doesn’t mean financial services companies want to jump into the MCP and Agent2Agent (A2A) bandwagon immediately. Since MCP is open source and new, it is still undergoing constant updates. Sean Neville, cofounder of Catena Labs said that while MCP offers agent identification, which is key for many companies, there are still some missing features, such as guardrails for communication and, most importantly, an audit trail. These issues could either be solved through MCP, A2A or even an entirely different standard like LOKA. He said one of the biggest problems with the current MCP revolves around authentication. When agents become part of the financial system, even MCP or A2A, there’s no real way to do “know-your-customer” on agents. Neville said financial institutions need to know that their agents are dealing with licensed entities, so the agent must be able to point to that verifiably. John Waldron, senior vice president at Elavon, doesn’t discount the possibility that financial institutions may work towards supporting MCP or A2A in the future.  “Looking at it from a business perspective and demand, I think MCP is a very critical part of where I think the business logic is going,” he said. 

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