arXiv subjects

Oshani Seneviratne

Publications and source records attributed to Oshani Seneviratne.

At least 37 records · Page 2Linked to original sources

arXiv2025

Resource-Efficient LLM Application for Structured Transformation of Unstructured Financial Contracts

The transformation of unstructured legal contracts into standardized, machine-readable formats is essential for automating financial workflows. The Common Domain Model (CDM) provides a standardized framework for this purpose, but converting complex legal documents like Credit Support Annexes (CSAs) into CDM representations remains a significant challenge. In this paper, we present an extension of the CDMizer framework, a template-driven solution that ensures syntactic correctness and adherence to the CDM schema during contract-to-CDM conversion. We apply this extended framework to a real-world task, comparing its performance with a benchmark developed by the International Swaps and Derivatives Association (ISDA) for CSA clause extraction. Our results show that CDMizer, when integrated with a significantly smaller, open-source Large Language Model (LLM), achieves competitive performance in terms of accuracy and efficiency against larger, proprietary models. This work underscores the potential of resource-efficient solutions to automate legal contract transformation, offering a cost-effective and scalable approach that can meet the needs of financial institutions with constrained resources or strict data privacy requirements.

cs.IR↗

arXiv2025

Explainable Federated Learning for U.S. State-Level Financial Distress Modeling

We present the first application of federated learning (FL) to the U.S. National Financial Capability Study, introducing an interpretable framework for predicting consumer financial distress across all 50 states and the District of Columbia without centralizing sensitive data. Our cross-silo FL setup treats each state as a distinct data silo, simulating real-world governance in nationwide financial systems. Unlike prior work, our approach integrates two complementary explainable AI techniques to identify both global (nationwide) and local (state-specific) predictors of financial hardship, such as contact from debt collection agencies. We develop a machine learning model specifically suited for highly categorical, imbalanced survey data. This work delivers a scalable, regulation-compliant blueprint for early warning systems in finance, demonstrating how FL can power socially responsible AI applications in consumer credit risk and financial inclusion.

q-fin.ST↗

arXiv2025

Aligning Language Models with Investor and Market Behavior for Financial Recommendations

Most financial recommendation systems often fail to account for key behavioral and regulatory factors, leading to advice that is misaligned with user preferences, difficult to interpret, or unlikely to be followed. We present FLARKO (Financial Language-model for Asset Recommendation with Knowledge-graph Optimization), a novel framework that integrates Large Language Models (LLMs), Knowledge Graphs (KGs), and Kahneman-Tversky Optimization (KTO) to generate asset recommendations that are both profitable and behaviorally aligned. FLARKO encodes users' transaction histories and asset trends as structured KGs, providing interpretable and controllable context for the LLM. To demonstrate the adaptability of our approach, we develop and evaluate both a centralized architecture (CenFLARKO) and a federated variant (FedFLARKO). To our knowledge, this is the first demonstration of combining KTO for fine-tuning of LLMs for financial asset recommendation. We also present the first use of structured KGs to ground LLM reasoning over behavioral financial data in a federated learning (FL) setting. Evaluated on the FAR-Trans dataset, FLARKO consistently outperforms state-of-the-art recommendation baselines on behavioral alignment and joint profitability, while remaining interpretable and resource-efficient.

q-fin.PM↗

arXiv2025

Parallel and Multi-Stage Knowledge Graph Retrieval for Behaviorally Aligned Financial Asset Recommendations

Large language models (LLMs) show promise for personalized financial recommendations but are hampered by context limits, hallucinations, and a lack of behavioral grounding. Our prior work, FLARKO, embedded structured knowledge graphs (KGs) in LLM prompts to align advice with user behavior and market data. This paper introduces RAG-FLARKO, a retrieval-augmented extension to FLARKO, that overcomes scalability and relevance challenges using multi-stage and parallel KG retrieval processes. Our method first retrieves behaviorally relevant entities from a user's transaction KG and then uses this context to filter temporally consistent signals from a market KG, constructing a compact, grounded subgraph for the LLM. This pipeline reduces context overhead and sharpens the model's focus on relevant information. Empirical evaluation on a real-world financial transaction dataset demonstrates that RAG-FLARKO significantly enhances recommendation quality. Notably, our framework enables smaller, more efficient models to achieve high performance in both profitability and behavioral alignment, presenting a viable path for deploying grounded financial AI in resource-constrained environments.

cs.LG↗

arXiv2025

Curriculum-Guided Reinforcement Learning for Synthesizing Gas-Efficient Financial Derivatives Contracts

Smart contract-based automation of financial derivatives offers substantial efficiency gains, but its real-world adoption is constrained by the complexity of translating financial specifications into gas-efficient executable code. In particular, generating code that is both functionally correct and economically viable from high-level specifications, such as the Common Domain Model (CDM), remains a significant challenge. This paper introduces a Reinforcement Learning (RL) framework to generate functional and gas-optimized Solidity smart contracts directly from CDM specifications. We employ a Proximal Policy Optimization (PPO) agent that learns to select optimal code snippets from a pre-defined library. To manage the complex search space, a two-phase curriculum first trains the agent for functional correctness before shifting its focus to gas optimization. Our empirical results show the RL agent learns to generate contracts with significant gas savings, achieving cost reductions of up to 35.59% on unseen test data compared to unoptimized baselines. This work presents a viable methodology for the automated synthesis of reliable and economically sustainable smart contracts, bridging the gap between high-level financial agreements and efficient on-chain execution.

cs.LG↗

arXiv2025

MetaExplainer: A Framework to Generate Multi-Type User-Centered Explanations for AI Systems

Explanations are crucial for building trustworthy AI systems, but a gap often exists between the explanations provided by models and those needed by users. To address this gap, we introduce MetaExplainer, a neuro-symbolic framework designed to generate user-centered explanations. Our approach employs a three-stage process: first, we decompose user questions into machine-readable formats using state-of-the-art large language models (LLM); second, we delegate the task of generating system recommendations to model explainer methods; and finally, we synthesize natural language explanations that summarize the explainer outputs. Throughout this process, we utilize an Explanation Ontology to guide the language models and explainer methods. By leveraging LLMs and a structured approach to explanation generation, MetaExplainer aims to enhance the interpretability and trustworthiness of AI systems across various applications, providing users with tailored, question-driven explanations that better meet their needs. Comprehensive evaluations of MetaExplainer demonstrate a step towards evaluating and utilizing current state-of-the-art explanation frameworks. Our results show high performance across all stages, with a 59.06% F1-score in question reframing, 70% faithfulness in model explanations, and 67% context-utilization in natural language synthesis. User studies corroborate these findings, highlighting the creativity and comprehensiveness of generated explanations. Tested on the Diabetes (PIMA Indian) tabular dataset, MetaExplainer supports diverse explanation types, including Contrastive, Counterfactual, Rationale, Case-Based, and Data explanations. The framework's versatility and traceability from using ontology to guide LLMs suggest broad applicability beyond the tested scenarios, positioning MetaExplainer as a promising tool for enhancing AI explainability across various domains.

cs.HC↗

arXiv2025

SemCAFE: When Named Entities make the Difference Assessing Web Source Reliability through Entity-level Analytics

With the shift from traditional to digital media, the online landscape now hosts not only reliable news articles but also a significant amount of unreliable content. Digital media has faster reachability by significantly influencing public opinion and advancing political agendas. While newspaper readers may be familiar with their preferred outlets political leanings or credibility, determining unreliable news articles is much more challenging. The credibility of many online sources is often opaque, with AI generated content being easily disseminated at minimal cost. Unreliable news articles, particularly those that followed the Russian invasion of Ukraine in 2022, closely mimic the topics and writing styles of credible sources, making them difficult to distinguish. To address this, we introduce SemCAFE, a system designed to detect news reliability by incorporating entity relatedness into its assessment. SemCAFE employs standard Natural Language Processing techniques, such as boilerplate removal and tokenization, alongside entity level semantic analysis using the YAGO knowledge base. By creating a semantic fingerprint for each news article, SemCAFE could assess the credibility of 46,020 reliable and 3,407 unreliable articles on the 2022 Russian invasion of Ukraine. Our approach improved the macro F1 score by 12% over state of the art methods. The sample data and code are available on GitHub

cs.CL↗

arXiv2025

Avoiding Over-Personalization with Rule-Guided Knowledge Graph Adaptation for LLM Recommendations

We present a lightweight neuro-symbolic framework to mitigate over-personalization in LLM-based recommender systems by adapting user-side Knowledge Graphs (KGs) at inference time. Instead of retraining models or relying on opaque heuristics, our method restructures a user's Personalized Knowledge Graph (PKG) to suppress feature co-occurrence patterns that reinforce Personalized Information Environments (PIEs), i.e., algorithmically induced filter bubbles that constrain content diversity. These adapted PKGs are used to construct structured prompts that steer the language model toward more diverse, Out-PIE recommendations while preserving topical relevance. We introduce a family of symbolic adaptation strategies, including soft reweighting, hard inversion, and targeted removal of biased triples, and a client-side learning algorithm that optimizes their application per user. Experiments on a recipe recommendation benchmark show that personalized PKG adaptations significantly increase content novelty while maintaining recommendation quality, outperforming global adaptation and naive prompt-based methods.

cs.IR↗

arXiv2025

FinSurvival: A Suite of Large Scale Survival Modeling Tasks from Finance

Survival modeling predicts the time until an event occurs and is widely used in risk analysis; for example, it's used in medicine to predict the survival of a patient based on censored data. There is a need for large-scale, realistic, and freely available datasets for benchmarking artificial intelligence (AI) survival models. In this paper, we derive a suite of 16 survival modeling tasks from publicly available transaction data generated by lending of cryptocurrencies in Decentralized Finance (DeFi). Each task was constructed using an automated pipeline based on choices of index and outcome events. For example, the model predicts the time from when a user borrows cryptocurrency coins (index event) until their first repayment (outcome event). We formulate a survival benchmark consisting of a suite of 16 survival-time prediction tasks (FinSurvival). We also automatically create 16 corresponding classification problems for each task by thresholding the survival time using the restricted mean survival time. With over 7.5 million records, FinSurvival provides a suite of realistic financial modeling tasks that will spur future AI survival modeling research. Our evaluation indicated that these are challenging tasks that are not well addressed by existing methods. FinSurvival enables the evaluation of AI survival models applicable to traditional finance, industry, medicine, and commerce, which is currently hindered by the lack of large public datasets. Our benchmark demonstrates how AI models could assess opportunities and risks in DeFi. In the future, the FinSurvival benchmark pipeline can be used to create new benchmarks by incorporating more DeFi transactions and protocols as the use of cryptocurrency grows.

q-fin.ST↗

arXiv2025

AI4Contracts: LLM & RAG-Powered Encoding of Financial Derivative Contracts

Large Language Models (LLMs) and Retrieval-Augmented Generation (RAG) are reshaping how AI systems extract and organize information from unstructured text. A key challenge is designing AI methods that can incrementally extract, structure, and validate information while preserving hierarchical and contextual relationships. We introduce CDMizer, a template-driven, LLM, and RAG-based framework for structured text transformation. By leveraging depth-based retrieval and hierarchical generation, CDMizer ensures a controlled, modular process that aligns generated outputs with predefined schema. Its template-driven approach guarantees syntactic correctness, schema adherence, and improved scalability, addressing key limitations of direct generation methods. Additionally, we propose an LLM-powered evaluation framework to assess the completeness and accuracy of structured representations. Demonstrated in the transformation of Over-the-Counter (OTC) financial derivative contracts into the Common Domain Model (CDM), CDMizer establishes a scalable foundation for AI-driven document understanding, structured synthesis, and automated validation in broader contexts.

cs.IR↗

arXiv2025

Terminators: Terms of Service Parsing and Auditing Agents

Terms of Service (ToS) documents are often lengthy and written in complex legal language, making them difficult for users to read and understand. To address this challenge, we propose Terminators, a modular agentic framework that leverages large language models (LLMs) to parse and audit ToS documents. Rather than treating ToS understanding as a black-box summarization problem, Terminators breaks the task down to three interpretable steps: term extraction, verification, and accountability planning. We demonstrate the effectiveness of our method on the OpenAI ToS using GPT-4o, highlighting strategies to minimize hallucinations and maximize auditability. Our results suggest that structured, agent-based LLM workflows can enhance both the usability and enforceability of complex legal documents. By translating opaque terms into actionable, verifiable components, Terminators promotes ethical use of web content by enabling greater transparency, empowering users to understand their digital rights, and supporting automated policy audits for regulatory or civic oversight.

cs.IR↗

arXiv2025

Blockchain-based Framework for Scalable and Incentivized Federated Learning

Federated Learning (FL) enables collaborative model training without sharing raw data, preserving privacy while harnessing distributed datasets. However, traditional FL systems often rely on centralized aggregating mechanisms, introducing trust issues, single points of failure, and limited mechanisms for incentivizing meaningful client contributions. These challenges are exacerbated as FL scales to train resource-intensive models, such as large language models (LLMs), requiring scalable, decentralized solutions. This paper presents a blockchain-based FL framework that addresses these limitations by integrating smart contracts and a novel hybrid incentive mechanism. The framework automates critical FL tasks, including client registration, update validation, reward distribution, and maintaining a transparent global state. The hybrid incentive mechanism combines on-chain alignment-based rewards, off-chain fairness checks, and consistency multipliers to ensure fairness, transparency, and sustained engagement. We evaluate the framework through gas cost analysis, demonstrating its feasibility for different scales of federated learning scenarios.

cs.LG↗

arXiv2025

Federated Fine-Tuning of Large Language Models: Kahneman-Tversky vs. Direct Preference Optimization

We evaluate Kahneman-Tversky Optimization (KTO) as a fine-tuning method for large language models (LLMs) in federated learning (FL) settings, comparing it against Direct Preference Optimization (DPO). Using Alpaca-7B as the base model, we fine-tune on a realistic dataset under both methods and evaluate performance using MT-Bench-1, Vicuna, and AdvBench benchmarks. Additionally, we introduce a redistributed dataset setup, where only KTO is applicable due to its ability to handle single-response feedback, unlike DPO's reliance on paired responses. Our results demonstrate that KTO, in both its original (KTOO) and redistributed (KTOR) configurations, consistently outperforms DPO across all benchmarks. In the redistributed setup, KTO further validates its flexibility and resilience by maintaining superior performance in scenarios where DPO cannot be applied. These findings establish KTO as a robust and scalable fine-tuning method for FL, motivating its adoption for privacy-preserving, decentralized, and heterogeneous environments.

cs.LG↗

arXiv2025

Explainability-Driven Quality Assessment for Rule-Based Systems

This paper introduces an explanation framework designed to enhance the quality of rules in knowledge-based reasoning systems based on dataset-driven insights. The traditional method for rule induction from data typically requires labor-intensive labeling and data-driven learning. This framework provides an alternative and instead allows for the data-driven refinement of existing rules: it generates explanations of rule inferences and leverages human interpretation to refine rules. It leverages four complementary explanation types: trace-based, contextual, contrastive, and counterfactual, providing diverse perspectives for debugging, validating, and ultimately refining rules. By embedding explainability into the reasoning architecture, the framework enables knowledge engineers to address inconsistencies, optimize thresholds, and ensure fairness, transparency, and interpretability in decision-making processes. Its practicality is demonstrated through a use case in finance.

cs.AI↗

arXiv2025

On Learning Representations for Tabular Data Distillation

Dataset distillation generates a small set of information-rich instances from a large dataset, resulting in reduced storage requirements, privacy or copyright risks, and computational costs for downstream modeling, though much of the research has focused on the image data modality. We study tabular data distillation, which brings in novel challenges such as the inherent feature heterogeneity and the common use of non-differentiable learning models (such as decision tree ensembles and nearest-neighbor predictors). To mitigate these challenges, we present $\texttt{TDColER}$, a tabular data distillation framework via column embeddings-based representation learning. To evaluate this framework, we also present a tabular data distillation benchmark, ${\sf \small TDBench}$. Based on an elaborate evaluation on ${\sf \small TDBench}$, resulting in 226,890 distilled datasets and 548,880 models trained on them, we demonstrate that $\texttt{TDColER}$ is able to boost the distilled data quality of off-the-shelf distillation schemes by 0.5-143% across 7 different tabular learning models.

cs.LG↗

arXiv2024

Enhancing Web Spam Detection through a Blockchain-Enabled Crowdsourcing Mechanism

The proliferation of spam on the Web has necessitated the development of machine learning models to automate their detection. However, the dynamic nature of spam and the sophisticated evasion techniques employed by spammers often lead to low accuracy in these models. Traditional machine-learning approaches struggle to keep pace with spammers' constantly evolving tactics, resulting in a persistent challenge to maintain high detection rates. To address this, we propose blockchain-enabled incentivized crowdsourcing as a novel solution to enhance spam detection systems. We create an incentive mechanism for data collection and labeling by leveraging blockchain's decentralized and transparent framework. Contributors are rewarded for accurate labels and penalized for inaccuracies, ensuring high-quality data. A smart contract governs the submission and evaluation process, with participants staking cryptocurrency as collateral to guarantee integrity. Simulations show that incentivized crowdsourcing improves data quality, leading to more effective machine-learning models for spam detection. This approach offers a scalable and adaptable solution to the challenges of traditional methods.

cs.CR↗

arXiv2024

Semantic Interoperability on Blockchain by Generating Smart Contracts Based on Knowledge Graphs

Background: Health 3.0 allows decision making to be based on longitudinal data from multiple institutions, from across the patient's healthcare journey. In such a distributed setting, blockchain smart contracts can act as neutral intermediaries to implement trustworthy decision making. Objective: In a distributed setting, transmitted data will be structured using standards (such as HL7 FHIR) for semantic interoperability. In turn, the smart contract will require interoperability with this standard, implement a complex communication setup (e.g., using oracles), and be developed using blockchain languages (e.g., Solidity). We propose the encoding of smart contract logic using a high-level semantic Knowledge Graph, using concepts from the domain standard. We then deploy this semantic KG on blockchain. Methods: Off-chain, a code generation pipeline compiles the KG into a concrete smart contract, which is then deployed on-chain. Our pipeline targets an intermediary bridge representation, which can be transpiled into a specific blockchain language. Our choice avoids on-chain rule engines, with unpredictable and likely higher computational cost; it is thus in line with the economic rules of blockchain. Results: We applied our code generation approach to generate smart contracts for 3 health insurance cases from Medicare. We discuss the suitability of our approach - the need for a neutral intermediary - for a number of healthcare use cases. Our evaluation finds that the generated contracts perform well in terms of correctness and execution cost ("gas") on blockchain. Conclusions: We showed that it is feasible to automatically generate smart contract code based on a semantic KG, in a way that respects the economic rules of blockchain. Future work includes studying the use of Large Language Models (LLM) in our approach, and evaluations on other blockchains.

cs.CR↗

arXiv2024

Fed-RD: Privacy-Preserving Federated Learning for Financial Crime Detection

We introduce Federated Learning for Relational Data (Fed-RD), a novel privacy-preserving federated learning algorithm specifically developed for financial transaction datasets partitioned vertically and horizontally across parties. Fed-RD strategically employs differential privacy and secure multiparty computation to guarantee the privacy of training data. We provide theoretical analysis of the end-to-end privacy of the training algorithm and present experimental results on realistic synthetic datasets. Our results demonstrate that Fed-RD achieves high model accuracy with minimal degradation as privacy increases, while consistently surpassing benchmark results.

cs.CE↗