# FinCoT: Grounding Chain-of-Thought in Expert Financial Reasoning

arXiv: https://arxiv.org/abs/2506.16123 · HTML: https://mlsanity.com/paper/2506.16123/

## Key facts

- Cited by 5 papers in the map (data through 14 Oct 2026).
- Placed in Reasoning for agents, planning and code, one of 17 directions in LLM reasoning.
- Builds on 21 of its 110 references that are in the map.
- First posted on arXiv 19 Jun 2025.

## Placed in

- LLM reasoning / [Reasoning for agents, planning and code](https://mlsanity.com/lr/reasoning-for-agents-planning-and-code/)

## Builds on (most cited first, 21 of 21)

- [Attention Is All You Need](https://mlsanity.com/paper/1706.03762/) (2017)
- [Language Models are Few-Shot Learners](https://mlsanity.com/paper/2005.14165/) (2020)
- [Chain-of-Thought Prompting Elicits Reasoning in Large Language Models](https://mlsanity.com/paper/2201.11903/) (2022)
- [Finetuned Language Models Are Zero-Shot Learners](https://mlsanity.com/paper/2109.01652/) (2021)
- [FlashAttention: Fast and Memory-Efficient Exact Attention with IO-Awareness](https://mlsanity.com/paper/2205.14135/) (2022)
- [Tree of Thoughts: Deliberate Problem Solving with Large Language Models](https://mlsanity.com/paper/2305.10601/) (2023)
- [Solving Quantitative Reasoning Problems with Language Models](https://mlsanity.com/paper/2206.14858/) (2022)
- [Accelerating Large Language Model Decoding with Speculative Sampling](https://mlsanity.com/paper/2302.01318/) (2023)
- [Fast Transformer Decoding: One Write-Head is All You Need](https://mlsanity.com/paper/1911.02150/) (2019)
- [FinQA: A Dataset of Numerical Reasoning over Financial Data](https://mlsanity.com/paper/2109.00122/) (2021)
- [Non-Autoregressive Neural Machine Translation](https://mlsanity.com/paper/1711.02281/) (2017)
- [FinBERT: A Pretrained Language Model for Financial Communications](https://mlsanity.com/paper/2006.08097/) (2020)
- [A Survey of Large Language Models for Financial Applications: Progress, Prospects and Challenges](https://mlsanity.com/paper/2406.11903/) (2024)
- [Fin-R1: A Large Language Model for Financial Reasoning through Reinforcement Learning](https://mlsanity.com/paper/2503.16252/) (2025)
- [Fino1: On the Transferability of Reasoning-Enhanced LLMs and Reinforcement Learning to Finance](https://mlsanity.com/paper/2502.08127/) (2025)
- [Optimizing Temperature for Language Models with Multi-Sample Inference](https://mlsanity.com/paper/2502.05234/) (2025)
- [FinTral: A Family of GPT-4 Level Multimodal Financial Large Language Models](https://mlsanity.com/paper/2402.10986/) (2024)
- [Demystifying Domain-adaptive Post-training for Financial LLMs](https://mlsanity.com/paper/2501.04961/) (2025)
- [DianJin-R1: Evaluating and Enhancing Financial Reasoning in Large Language Models](https://mlsanity.com/paper/2504.15716/) (2025)
- [Code Prompting: a Neural Symbolic Method for Complex Reasoning in Large Language Models](https://mlsanity.com/paper/2305.18507/) (2023)
- [Enhancing Reasoning to Adapt Large Language Models for Domain-Specific Applications](https://mlsanity.com/paper/2502.04384/) (2025)

## Built on by (most cited first, 5 of 5)

- [Agentic Trading: When LLM Agents Meet Financial Markets](https://mlsanity.com/paper/2605.19337/) (2026)
- [Analogy-Driven Financial Chain-of-Thought (AD-FCoT): A Prompting Approach for Financial Sentiment Analysis](https://mlsanity.com/paper/2509.12611/) (2025)
- [Resisting Manipulative Bots in Meme Coin Copy Trading: A Multi-Agent Approach with Chain-of-Thought Reasoning](https://mlsanity.com/paper/2601.08641/) (2026)
- [Less Data Approximates More: Earning Faithful Confidence in High-Stakes Domains](https://mlsanity.com/paper/2604.08454/) (2026)
- [AnalysisBank: An Expert Analysis Pattern Library for Financial Report Generation](https://mlsanity.com/paper/2609.00818/) (2026)

## Abstract (arXiv)

This paper presents FinCoT, a structured chain-of-thought (CoT) prompting framework that embeds domain-specific expert financial reasoning blueprints to guide large language models' behaviors. We identify three main prompting styles in financial NLP (FinNLP): (1) standard prompting (zero-shot), (2) unstructured CoT (free-form reasoning), and (3) structured CoT (with explicitly structured reasoning steps). Prior work has mainly focused on the first two, while structured CoT remains underexplored and lacks domain expertise incorporation. Therefore, we evaluate all three prompting approaches across ten CFA-style financial domains and introduce FinCoT as the first structured finance-specific prompting approach incorporating blueprints from domain experts. FinCoT improves the accuracy of a general-purpose model, Qwen3-8B-Base, from 63.2% to 80.5%, and boosts Fin-R1 (7B), a finance-specific model, from 65.7% to 75.7%, while reducing output length by up to 8.9x and 1.16x compared to structured CoT methods, respectively. We find that FinCoT proves most effective for models lacking financial post-training. Our findings show that FinCoT does not only improve performance and reduce inference costs but also yields more interpretable and expert-aligned reasoning traces.