mlsanityData to 14 Oct 2026

Understanding Structured Financial Data with LLMs: A Case Study on Fraud Detection

arXiv 2512.13040 ↗First posted 15 Dec 2025cs.LG cs.CLcited by 4

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Abstract (arXiv)

Detecting fraud in financial transactions typically relies on tabular models that demand heavy feature engineering to handle high-dimensional data and offer limited interpretability, making it difficult for humans to understand predictions. Large Language Models (LLMs), in contrast, can produce human-readable explanations and facilitate feature analysis, potentially reducing the manual workload of fraud analysts and informing system refinements. However, they perform poorly when applied directly to tabular fraud detection due to the difficulty of reasoning over many features, the extreme class imbalance, and the absence of contextual information. To bridge this gap, we introduce FinFRE-RAG, a two-stage approach that applies importance-guided feature reduction to serialize a compact subset of numeric/categorical attributes into natural language and performs retrieval-augmented in-context learning over label-aware, instance-level exemplars. Across four public fraud datasets and three families of open-weight LLMs, FinFRE-RAG substantially improves F1/MCC over direct prompting and is competitive with strong tabular baselines in several settings. Although these LLMs still lag behind specialized classifiers, they narrow the performance gap and provide interpretable rationales, highlighting their value as assistive tools in fraud analysis.

Key facts. Cited by 4 papers in the map (data through 14 Oct 2026). Builds on 24 of its 45 references that are in the map. First posted on arXiv 15 Dec 2025.

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24 of 45 references.

References · 24

  1. 2020Language Models are Few-Shot Learnerscited by 32,419
  2. 2023Llama 2: Open Foundation and Fine-Tuned Chat Modelscited by 13,028
  3. 2020Retrieval-Augmented Generation for Knowledge-Intensive NLP Taskscited by 9,297
  4. 2016XGBoost: A Scalable Tree Boosting Systemcited by 5,166
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  8. 2022Rethinking the Role of Demonstrations: What Makes In-Context Learning Work?cited by 1,434
  9. 2023BloombergGPT: A Large Language Model for Financecited by 939
  10. 2023In-Context Retrieval-Augmented Language Modelscited by 702
  11. 2020Enhancing Graph Neural Network-based Fraud Detectors against Camouflaged Fraudsterscited by 250
  12. 2020FinBERT: A Pretrained Language Model for Financial Communicationscited by 161
12 more
  1. 2024TabM: Advancing Tabular Deep Learning with Parameter-Efficient Ensemblingcited by 113
  2. 2023Large Language Models as Analogical Reasonerscited by 107
  3. 2023FinGPT: Instruction Tuning Benchmark for Open-Source Large Language Models in Financial Datasetscited by 69
  4. 2024BioRAG: A RAG-LLM Framework for Biological Question Reasoningcited by 43
  5. 2025Fraud-R1 : A Multi-Round Benchmark for Assessing the Robustness of LLM Against Augmented Fraud and Phishing Inducementscited by 32
  6. 2025FinMME: Benchmark Dataset for Financial Multi-Modal Reasoning Evaluationcited by 30
  7. 2024Large Language Models as Financial Data Annotators: A Study on Effectiveness and Efficiencycited by 18
  8. 2024SEFraud: Graph-based Self-Explainable Fraud Detection via Interpretative Mask Learningcited by 12
  9. 2025Can LLMs Find Fraudsters? Multi-level LLM Enhanced Graph Fraud Detectioncited by 10
  10. 2024FCMR: Robust Evaluation of Financial Cross-Modal Multi-Hop Reasoningcited by 7
  11. 2025Advanced Real-Time Fraud Detection Using RAG-Based LLMscited by 7
  12. 2025DiMA: An LLM-Powered Ride-Hailing Assistant at DiDicited by 7

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Cited by year (2026 to 14 Oct)

Citing papers per year: 2026: 4.

4 papers.

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  1. 2025Measuring What LLMs Think They Do: SHAP Faithfulness and Deployability on Financial Tabular Classification
  2. 2025Exploring the In-Context Learning Capabilities of LLMs for Money Laundering Detection in Financial Graphs
  3. 2025Interpreting LLMs as Credit Risk Classifiers: Do Their Feature Explanations Align with Classical ML?
  4. 2026FinRule-Bench: A Benchmark for Joint Reasoning over Financial Tables and Principles
  5. 2026Toward Auditable Fraud Detection: Combining Graph Features, Model Explanations, and Agentic Case Investigation
  6. 2025FAA Framework: A Large Language Model-Based Approach for Credit Card Fraud Investigations
  7. 2026Reinforcement Learning of Large Language Models for Interpretable Credit Card Fraud Detection
  8. 2026Behavior-Grounded Semantic Enrichment for Financial Fraud Modeling and Reasoning