Daily Papers

FinanceBench is a first-of-its-kind test suite for evaluating the performance of LLMs on open book financial question answering (QA). It comprises 10,231 questions about publicly traded companies, with corresponding answers and evidence strings. The questions in FinanceBench are ecologically valid and cover a diverse set of scenarios. They are intended to be clear-cut and straightforward to answer to serve as a minimum performance standard. We test 16 state of the art model configurations (including GPT-4-Turbo, Llama2 and Claude2, with vector stores and long context prompts) on a sample of 150 cases from FinanceBench, and manually review their answers (n=2,400). The cases are available open-source. We show that existing LLMs have clear limitations for financial QA. Notably, GPT-4-Turbo used with a retrieval system incorrectly answered or refused to answer 81% of questions. While augmentation techniques such as using longer context window to feed in relevant evidence improve performance, they are unrealistic for enterprise settings due to increased latency and cannot support larger financial documents. We find that all models examined exhibit weaknesses, such as hallucinations, that limit their suitability for use by enterprises.

This paper investigates the impact of domain-specific model fine-tuning and of reasoning mechanisms on the performance of question-answering (Q&A) systems powered by large language models (LLMs) and Retrieval-Augmented Generation (RAG). Using the FinanceBench SEC financial filings dataset, we observe that, for RAG, combining a fine-tuned embedding model with a fine-tuned LLM achieves better accuracy than generic models, with relatively greater gains attributable to fine-tuned embedding models. Additionally, employing reasoning iterations on top of RAG delivers an even bigger jump in performance, enabling the Q&A systems to get closer to human-expert quality. We discuss the implications of such findings, propose a structured technical design space capturing major technical components of Q&A AI, and provide recommendations for making high-impact technical choices for such components. We plan to follow up on this work with actionable guides for AI teams and further investigations into the impact of domain-specific augmentation in RAG and into agentic AI capabilities such as advanced planning and reasoning.

Large language models (LLMs) have empowered AI agents to tackle increasingly complex tasks. However, most existing agents remain limited to static planning and brittle interactions, falling short of true collaboration or adaptive reasoning. We introduce ProSEA, a modular, general-purpose multi-agent framework designed for iterative problem solving through exploration and plan evolution. ProSEA features a hierarchical architecture in which a Manager Agent orchestrates domain-specialized Expert Agents, decomposes tasks, and adaptively replans based on structured feedback from failed attempts. Unlike prior systems, ProSEA agents report not only success or failure but also detailed reasons for failure and newly discovered constraints, enabling dynamic plan refinement informed by exploratory traces. The framework operates autonomously but supports seamless integration with human collaborators when needed. Experiments on the challenging FinanceBench benchmark demonstrate that ProSEA, even without human feedback, outperforms state-of-the-art baselines and achieves robust performance across reasoning-heavy tasks. These results underscore ProSEA's potential as a foundation for more transparent, adaptive, and human-aligned AI agents.

Enterprise repositories are large, heteroge- neous, and continuously updated, making re- trieval difficult when efficient access, source- faithful evidence, and cross-query adaptation must be supported together. Enterprise mem- ory extends retrieval beyond the model con- text, but existing systems do not jointly address collection-specific hierarchy construction, low- cost routing, detailed evidence loading, and workload-aware memory updates at this scale. We introduce MEMONDEMAND, short for On- Demand Memory, a memory management sys- tem with three coordinated mechanisms: a dy- namic multi-level hierarchy that determines the abstraction structure and depth for each col- lection, dual memory at every hierarchy level that separates distilled routing from detailed evidence, and on-demand memory promotion that updates node priority under a bounded active-state budget. On EnterpriseRAG-Bench, MEMONDEMAND outperforms the strongest published LB#1 result at every evaluated scale from 10M tokens through the complete 618M- token collection, with gains of 12.23% at 10M and 4.66% at 618M. Results on FinanceBench, HotpotQA, and FRAMES further show strong performance across financial, multi-hop, and fact-retrieval settings. Together, these results establish MEMONDEMAND as an accurate, ef- ficient, and scalable memory solution for very large enterprise repositories across data scales, domains, and evidence requirements. Our code is available at https://github.com/ xfab-xinyuansong/MemOnDemand.git.

Large language models (LLMs) are increasingly being applied to financial analysis, reporting, investment decision support, risk management, compliance, and professional training. However, robust evaluation of their domain competence in finance remains incomplete. Widely used open benchmarks such as FinQA, ConvFinQA, and TAT-QA have played an important role in advancing financial question answering and numerical reasoning, but they focus primarily on question answering over financial reports and do not provide an explicit hierarchy of professional difficulty. Broader resources, including FinanceBench, PIXIU, FinBen, and FLaME, expand the coverage of financial tasks, yet the problem of evaluating the transition from foundational knowledge to expert-level financial reasoning remains open. In this work, we present FINESSE-Bench, a suite of eight specialized benchmarks comprising 3,993 questions for hierarchical evaluation of financial competencies in LLMs. FINESSE-Bench combines exam-oriented datasets inspired by professional certifications (CFA-like Levels 1-3, CMT-like Level 2, and CFTe-like Level 1), applied trading task collections, and a Russian-language olympiad benchmark. This design enables evaluation of domain breadth, performance degradation as difficulty increases, the ability to solve computational tasks, and model behavior in specialized financial domains. We also describe a unified evaluation protocol covering multiple-choice questions, numerical answers, and short open-ended responses, together with an automated scoring scheme for freeform answers based on the LLM-as-judge paradigm. FINESSE-Bench is intended both as a complement to existing open financial benchmarks and as a tool for more substantive evaluation of professionally relevant financial competencies in large language models.

Large language models often produce plausible numerical claims from financial filings while using the wrong reporting period, unit, line item, or formula. Verifying such claims requires more than rechecking arithmetic: a verifier must ground the relevant facts, establish the authorized calculation, and determine whether the candidate value follows from both. We propose VeriFin, a neurosymbolic verification framework for numerical financial question answering that grounds operands in filed XBRL facts, derives calculations from the question, filing linkbases, or documented metric definitions, and checks claims using Z3. When a claim is inconsistent, solver-derived unsatisfiable cores identify the conflicting facts, formula, and candidate value, enabling targeted repair. We evaluate VeriFin on XBRLFiling, a new 600-question benchmark constructed from 10-K filings of 28 U.S. companies, and on FinanceBench. On fixed candidate pools shared by all verification methods, VeriFin accepts none of the incorrect claims, whereas the baselines accept 6 to 92 incorrect claims on XBRLFiling's 600 claims and 4 to 21 incorrect claims on FinanceBench's 67 claims. The zero false-accept result persists across multiple answer-generator models. Solver-derived feedback further improves repair, achieving up to 69.9% recovery among true catches. These results show that source-grounded symbolic verification can provide a reliable and auditable acceptance control for LLM-generated financial claims.

Flat retrieval-augmented generation treats a corpus as a bag of chunks, discarding document hierarchy and cross document structure. We introduce SearchWiki, a harness framework that synthesizes a corpus into a hierarchical, typed, navigable wiki and trains an agent, WikiResearcher-9B, to retrieve information through multi-turn tool use. The wiki organizes knowledge into three layers - document overviews, cross- document topic pages, and page-level source records; enabling progressive refinement of retrieval when initial lookup misses. We optimize the agent's navigation policy with on-policy reinforcement learning with a multi-component reward function balancing answer correctness, retrieval quality and trajectory efficiency. Evaluation on ViDoRe-V3 (8 domains), FinanceBench, and memory benchmarks (LoCoMo, LongMemEval, PersonaMem-v2) shows that WikiResearcher- 9B which is our RL-tuned Qwen 9B model, significantly outperforms same-size untrained baselines and exceeds or matches larger external models. SearchWiki paired with WikiResearcher-9B demonstrates that learned navigation over structured corpora is a superior alternative to flat retrieval.

Sequential multi-agent LLM pipelines chain specialized agents without verification at handoffs, creating a structural flaw with measurable and severe consequences. We show that hallucinations injected at Stage 1 do not merely persist; they transform: raw numerical facts become derived computations, then narrative prose, then editorially approved conclusions. At each transformation, detectability degrades near-irreversibly. We formalize this as the hallucination snowball effect, a first-order Markov process over four states (Raw Fact to Derived to Narrative to Invisible) with empirically measured per-boundary escape probabilities of 24.6%, 48.3%, and 89.3%. Across 346 automatically injected hallucinations in a 4-agent financial analysis pipeline on FinanceBench, gpt-4o detection drops from 72.0% at Stage 1 to 50.9% at Stage 4, and 23.7% of hallucinations survive completely undetected in the final output. Even the strongest model tested (Qwen3.5-397B-A17B, 87.0% at Stage 1) faces a structural ceiling; projected Stage 4 detection is only {sim}60--65%. Critically, boundary gates using identical RAG verification tools reduce hallucination survival from 58.4% to 16.2% versus end-of-pipeline checking (Cohen's h = -0.911, p < 0.000001), while end-checking alone achieves merely 2.3 pp improvement over no verification. When you verify matters more than whether you verify. Our model predicts survival for n-agent linear pipelines and prescribes optimal verification resource allocation: invest at S_1{to}S_2 first, where 75.4% of hallucinations are still catchable, not at S_3{to}S_4 where 89.3% have already escaped.

Retrieval-Augmented Generation (RAG) has emerged as a promising framework to mitigate hallucinations in Large Language Models (LLMs), yet its overall performance is dependent on the underlying retrieval system. In the finance domain, documents such as 10-K reports pose distinct challenges due to domain-specific vocabulary and multi-hierarchical tabular data. In this work, we introduce an efficient, end-to-end RAG pipeline that enhances retrieval for financial documents through a three-phase approach: pre-retrieval, retrieval, and post-retrieval. In the pre-retrieval phase, various query and corpus preprocessing techniques are employed to enrich input data. During the retrieval phase, we fine-tuned state-of-the-art (SOTA) embedding models with domain-specific knowledge and implemented a hybrid retrieval strategy that combines dense and sparse representations. Finally, the post-retrieval phase leverages Direct Preference Optimization (DPO) training and document selection methods to further refine the results. Evaluations on seven financial question answering datasets-FinDER, FinQABench, FinanceBench, TATQA, FinQA, ConvFinQA, and MultiHiertt-demonstrate substantial improvements in retrieval performance, leading to more accurate and contextually appropriate generation. These findings highlight the critical role of tailored retrieval techniques in advancing the effectiveness of RAG systems for financial applications. A fully replicable pipeline is available on GitHub: https://github.com/seohyunwoo-0407/GAR.

LLMs are known to store vast amounts of knowledge in their parametric memory. However, learning and recalling facts from this memory is known to be unreliable, depending largely on the prevalence of particular facts in the training data and other factors which are poorly understood. Practitioners are lacking tools which will allow them to ensure that the models learn a given body of knowledge reliably and consistently. To this end, we propose Active Reading: a framework where we train models to study a given set of material with self-generated learning strategies. First, we demonstrate models trained with Active Reading on expert domains absorb significantly more knowledge than vanilla finetuning and other data augmentations. We train expert 8B models that achieve 66% on a Wikipedia-grounded subset of SimpleQA (+313% relative over vanilla finetuning) and 26% on FinanceBench (+160% relative over vanilla finetuning) by applying Active Reading to the source documents for each benchmark. Finally, we show that Active Reading can be utilized at pre-training scale to build more factual models. As a demonstration of this, we release Meta WikiExpert-8B, a Wikipedia-expert model trained on 1 trillion generated tokens, which outcompetes models with hundreds of billions of parameters on factual QA.

Large Language Models (LLMs) generate responses to questions; however, their effectiveness is often hindered by sub-optimal quality of answers and occasional failures to provide accurate responses to questions. To address these challenges, a fine-tuning process is employed, involving feedback and examples to refine models. The objective is to enhance AI models through continuous feedback loops, utilizing metrics such as cosine similarity, LLM evaluation and Rouge-L scores to evaluate the models. Leveraging LLMs like GPT-3.5, GPT4ALL, and LLaMA2, and Claude, this approach is benchmarked on financial datasets, including the FinanceBench and RAG Instruct Benchmark Tester Dataset, illustrating the necessity of fine-tuning. The results showcase the capability of fine-tuned models to surpass the accuracy of zero-shot LLMs, providing superior question and answering capabilities. Notably, the combination of fine-tuning the LLM with a process known as Retrieval Augmented Generation (RAG) proves to generate responses with improved accuracy.

Leveraging large language models in real-world settings often entails a need to utilize domain-specific data and tools in order to follow the complex regulations that need to be followed for acceptable use. Within financial sectors, modern enterprises increasingly rely on Retrieval-Augmented Generation (RAG) systems to address complex compliance requirements in financial document workflows. However, existing solutions struggle to account for the inherent heterogeneity of data (e.g., text, tables, diagrams) and evolving nature of regulatory standards used in financial filings, leading to compromised accuracy in critical information extraction. We propose the FinSage framework as a solution, utilizing a multi-aspect RAG framework tailored for regulatory compliance analysis in multi-modal financial documents. FinSage introduces three innovative components: (1) a multi-modal pre-processing pipeline that unifies diverse data formats and generates chunk-level metadata summaries, (2) a multi-path sparse-dense retrieval system augmented with query expansion (HyDE) and metadata-aware semantic search, and (3) a domain-specialized re-ranking module fine-tuned via Direct Preference Optimization (DPO) to prioritize compliance-critical content. Extensive experiments demonstrate that FinSage achieves an impressive recall of 92.51% on 75 expert-curated questions derived from surpasses the best baseline method on the FinanceBench question answering datasets by 24.06% in accuracy. Moreover, FinSage has been successfully deployed as financial question-answering agent in online meetings, where it has already served more than 1,200 people.