Model Context Protocol (MCP)
The Model Context Protocol (MCP) is an open standard for connecting AI applications to external tools, systems, and data sources in a consistent way. It was introduced by Anthropic in November 2024.
AI
Explanation
Without a common standard, every connection between an AI application and a system – such as a database, a file store, or a business application – has to be built individually. MCP defines a shared protocol:
• MCP servers expose tools, data, or prompts from a system.
• MCP clients, built into AI applications, connect to these servers and make their capabilities available to the model.
This allows AI agents to read information and perform actions in connected systems through a standardized interface, with permissions controlled by the user or organization.
Why It Matters
For enterprise AI, the value of an agent depends on its access to the right systems and data. Standards like MCP make it easier to connect AI to business applications, documentation, and project tools – and to manage which actions an agent is allowed to perform. For finance, clear permissions and traceability of every action remain essential.
Related Terms
AI Agent · Agentic AI · Retrieval-Augmented Generation · Large Language Model
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