# Advancing Financial Engineering with Foundation Models: Progress, Applications, and Challenges

arXiv: https://arxiv.org/abs/2507.18577 · HTML: https://mlsanity.com/paper/2507.18577/

## Key facts

- Cited by 4 papers in the map (data through 14 Oct 2026).
- Builds on 84 of its 128 references that are in the map.
- First posted on arXiv 7 Jul 2025.

## Builds on (most cited first, 30 of 84)

- [BERT: Pre-training of Deep Bidirectional Transformers for Language Understanding](https://mlsanity.com/paper/1810.04805/) (2018)
- [Learning Transferable Visual Models From Natural Language Supervision](https://mlsanity.com/paper/2103.00020/) (2021)
- [Exploring the Limits of Transfer Learning with a Unified Text-to-Text Transformer](https://mlsanity.com/paper/1910.10683/) (2019)
- [Llama 2: Open Foundation and Fine-Tuned Chat Models](https://mlsanity.com/paper/2307.09288/) (2023)
- [Qwen3 Technical Report](https://mlsanity.com/paper/2505.09388/) (2025)
- [Scaling Laws for Neural Language Models](https://mlsanity.com/paper/2001.08361/) (2020)
- [DeepSeek-R1: Incentivizing Reasoning Capability in LLMs via Reinforcement Learning](https://mlsanity.com/paper/2501.12948/) (2025)
- [BLIP-2: Bootstrapping Language-Image Pre-training with Frozen Image Encoders and Large Language Models](https://mlsanity.com/paper/2301.12597/) (2023)
- [Flamingo: a Visual Language Model for Few-Shot Learning](https://mlsanity.com/paper/2204.14198/) (2022)
- [BLIP: Bootstrapping Language-Image Pre-training for Unified Vision-Language Understanding and Generation](https://mlsanity.com/paper/2201.12086/) (2022)
- [On the Opportunities and Risks of Foundation Models](https://mlsanity.com/paper/2108.07258/) (2021)
- [MiniGPT-4: Enhancing Vision-Language Understanding with Advanced Large Language Models](https://mlsanity.com/paper/2304.10592/) (2023)
- [MMMU: A Massive Multi-discipline Multimodal Understanding and Reasoning Benchmark for Expert AGI](https://mlsanity.com/paper/2311.16502/) (2023)
- [A Time Series is Worth 64 Words: Long-term Forecasting with Transformers](https://mlsanity.com/paper/2211.14730/) (2022)
- [BLOOM: A 176B-Parameter Open-Access Multilingual Language Model](https://mlsanity.com/paper/2211.05100/) (2022)
- [ChartQA: A Benchmark for Question Answering about Charts with Visual and Logical Reasoning](https://mlsanity.com/paper/2203.10244/) (2022)
- [FEDformer: Frequency Enhanced Decomposed Transformer for Long-term Series Forecasting](https://mlsanity.com/paper/2201.12740/) (2022)
- [BloombergGPT: A Large Language Model for Finance](https://mlsanity.com/paper/2303.17564/) (2023)
- [Modeling Long- and Short-Term Temporal Patterns with Deep Neural Networks](https://mlsanity.com/paper/1703.07015/) (2017)
- [Time-LLM: Time Series Forecasting by Reprogramming Large Language Models](https://mlsanity.com/paper/2310.01728/) (2023)
- [A decoder-only foundation model for time-series forecasting](https://mlsanity.com/paper/2310.10688/) (2023)
- [InternLM2 Technical Report](https://mlsanity.com/paper/2403.17297/) (2024)
- [FinBERT: Financial Sentiment Analysis with Pre-trained Language Models](https://mlsanity.com/paper/1908.10063/) (2019)
- [Good Debt or Bad Debt: Detecting Semantic Orientations in Economic Texts](https://mlsanity.com/paper/1307.5336/) (2013)
- [FinGPT: Open-Source Financial Large Language Models](https://mlsanity.com/paper/2306.06031/) (2023)
- [Large Language Models in Finance: A Survey](https://mlsanity.com/paper/2311.10723/) (2023)
- [PIXIU: A Large Language Model, Instruction Data and Evaluation Benchmark for Finance](https://mlsanity.com/paper/2306.05443/) (2023)
- [ConvFinQA: Exploring the Chain of Numerical Reasoning in Conversational Finance Question Answering](https://mlsanity.com/paper/2210.03849/) (2022)
- [LLaVA-UHD: an LMM Perceiving Any Aspect Ratio and High-Resolution Images](https://mlsanity.com/paper/2403.11703/) (2024)
- [TradingAgents: Multi-Agents LLM Financial Trading Framework](https://mlsanity.com/paper/2412.20138/) (2024)

## Built on by (most cited first, 4 of 4)

- [Are Foundation Models Useful for Bankruptcy Prediction?](https://mlsanity.com/paper/2511.16375/) (2025)
- [The Label Horizon Paradox: Rethinking Supervision Targets in Financial Forecasting](https://mlsanity.com/paper/2602.03395/) (2026)
- [Benchmarks Are Not Validation: A System-Level View of Financial LLM Applications](https://mlsanity.com/paper/2607.28840/) (2026)
- [Backtrader-Bench: Benchmarking LLM Agents on Algorithmic Trading with Self-Generated MCQs](https://mlsanity.com/paper/2608.11232/) (2026)

## Abstract (arXiv)

The advent of foundation models (FMs), large-scale pre-trained models with strong generalization capabilities, has opened new frontiers for financial engineering. While general-purpose FMs such as GPT-4 and Gemini have demonstrated promising performance in tasks ranging from financial report summarization to sentiment-aware forecasting, many financial applications remain constrained by unique domain requirements such as multimodal reasoning, regulatory compliance, and data privacy. These challenges have spurred the emergence of financial foundation models (FFMs): a new class of models explicitly designed for finance. This survey presents a comprehensive overview of FFMs, with a taxonomy spanning three key modalities: financial language foundation models (FinLFMs), financial time-series foundation models (FinTSFMs), and financial visual-language foundation models (FinVLFMs). We review their architectures, training methodologies, datasets, and real-world applications. Furthermore, we identify critical challenges in data availability, algorithmic scalability, and infrastructure constraints and offer insights into future research opportunities. We hope this survey can serve as both a comprehensive reference for understanding FFMs and a practical roadmap for future innovation.