Fabrizio Dimino

Fabrizio Dimino, Krati Saxena, Bhaskarjit Sarmah et al.

Large Language Models are increasingly adopted in financial applications to support investment workflows. However, prior studies have seldom examined how these models reflect biases related to firm size, sector, or financial characteristics, which can significantly impact decision-making. This paper addresses this gap by focusing on representation bias in open-source Qwen models. We propose a balanced round-robin prompting method over approximately 150 U.S. equities, applying constrained decoding and token-logit aggregation to derive firm-level confidence scores across financial contexts. Using statistical tests and variance analysis, we find that firm size and valuation consistently increase model confidence, while risk factors tend to decrease it. Confidence varies significantly across sectors, with the Technology sector showing the greatest variability. When models are prompted for specific financial categories, their confidence rankings best align with fundamental data, moderately with technical signals, and least with growth indicators. These results highlight representation bias in Qwen models and motivate sector-aware calibration and category-conditioned evaluation protocols for safe and fair financial LLM deployment.

Fabrizio Dimino, Bhaskarjit Sarmah, Stefano Pasquali

The rapid adoption of large language models (LLMs) in financial services introduces new operational, regulatory, and security risks. Yet most red-teaming benchmarks remain domain-agnostic and fail to capture failure modes specific to regulated BFSI settings, where harmful behavior can be elicited through legally or professionally plausible framing. We propose a risk-aware evaluation framework for LLM security failures in Banking, Financial Services, and Insurance (BFSI), combining a domain-specific taxonomy of financial harms, an automated multi-round red-teaming pipeline, and an ensemble-based judging protocol. We introduce the Risk-Adjusted Harm Score (RAHS), a risk-sensitive metric that goes beyond success rates by quantifying the operational severity of disclosures, accounting for mitigation signals, and leveraging inter-judge agreement. Across diverse models, we find that higher decoding stochasticity and sustained adaptive interaction not only increase jailbreak success, but also drive systematic escalation toward more severe and operationally actionable financial disclosures. These results expose limitations of single-turn, domain-agnostic security evaluation and motivate risk-sensitive assessment under prolonged adversarial pressure for real-world BFSI deployment.

Yupeng Cao, Zhi Chen, Prashant Kumar et al.

The integration of Artificial Intelligence (AI) techniques, particularly large language models (LLMs), in finance has garnered increasing academic attention. Despite progress, existing studies predominantly focus on tasks like financial text summarization, question-answering, and stock movement prediction (binary classification), the application of LLMs to financial risk prediction remains underexplored. Addressing this gap, in this paper, we introduce RiskLabs, a novel framework that leverages LLMs to analyze and predict financial risks. RiskLabs uniquely integrates multimodal financial data, including textual and vocal information from Earnings Conference Calls (ECCs), market-related time series data, and contextual news data to improve financial risk prediction. Empirical results demonstrate RiskLabs' effectiveness in forecasting both market volatility and variance. Through comparative experiments, we examine the contributions of different data sources to financial risk assessment and highlight the crucial role of LLMs in this process. We also discuss the challenges associated with using LLMs for financial risk prediction and explore the potential of combining them with multimodal data for this purpose.

Fabrizio Dimino, Abhinav Arun, Bhaskarjit Sarmah et al.

Large language models (LLMs) are increasingly being used to extract structured knowledge from unstructured financial text. Although prior studies have explored various extraction methods, there is no universal benchmark or unified evaluation framework for the construction of financial knowledge graphs (KG). We introduce FinReflectKG - EvalBench, a benchmark and evaluation framework for KG extraction from SEC 10-K filings. Building on the agentic and holistic evaluation principles of FinReflectKG - a financial KG linking audited triples to source chunks from S&P 100 filings and supporting single-pass, multi-pass, and reflection-agent-based extraction modes - EvalBench implements a deterministic commit-then-justify judging protocol with explicit bias controls, mitigating position effects, leniency, verbosity and world-knowledge reliance. Each candidate triple is evaluated with binary judgments of faithfulness, precision, and relevance, while comprehensiveness is assessed on a three-level ordinal scale (good, partial, bad) at the chunk level. Our findings suggest that, when equipped with explicit bias controls, LLM-as-Judge protocols provide a reliable and cost-efficient alternative to human annotation, while also enabling structured error analysis. Reflection-based extraction emerges as the superior approach, achieving best performance in comprehensiveness, precision, and relevance, while single-pass extraction maintains the highest faithfulness. By aggregating these complementary dimensions, FinReflectKG - EvalBench enables fine-grained benchmarking and bias-aware evaluation, advancing transparency and governance in financial AI applications.