mlsanityData to 7 Oct 2026

Automated Regulatory Compliance Question Answering in Financial Services with Domain-Adapted Retrieval-Augmented Generation

arXiv 2609.30009 ↗First posted 24 Sep 2026cs.CL cs.AIcited by 0

On the map: Retrieval-augmented generation → Legal and financial RAG

Abstract (arXiv)

Financial institutions operate under dense, frequently amended rulebooks, and answering a compliance question correctly requires not only fluency but verifiable grounding in the authoritative text. Large language models are attractive for this task, yet the models that firms can realistically deploy on-premise are compact ones, and compact models hallucinate obligations. We study whether a carefully domain-adapted retrieval-augmented generation pipeline closes that gap. Our retriever is built in three stages on top of LegalBERT: entailment tuning that recasts question--passage matching as premise--hypothesis reconstruction, contrastive tuning with in-batch negatives, and score-level fusion with BM25. Our generator is a compact model (2B--12B parameters) served under 4-bit quantization, either prompted or adapted with retrieval-aware fine-tuning (RAFT) through LoRA. On ObliQA, a question-answering benchmark built from the Abu Dhabi Global Market rulebooks, the staged retriever raises Recall@10 from 0.256 to 0.774 and outperforms BM25 (0.678) and E5-large-v2 (0.758), the strongest general-purpose dense encoder we tested. RAFT-LoRA then improves the composite RePASs answer-quality score for every model we could adapt, with the largest gain on the weakest one. However, the adapted models do not transfer to Australian case-law questions, and a closed-book model that receives no passages at all scores within 0.011 RePASs of the full pipeline while producing answers that cite nothing and misstate obligations. The retrieval gain is therefore measured directly, the generation gain is a gain in RePASs rather than demonstrated grounding, and grounding itself requires an evaluation protocol that RePASs does not provide.

Key facts. No citing papers in the map yet (data through 7 Oct 2026). Placed in Legal and financial RAG, one of 15 directions in Retrieval-augmented generation. Builds on 41 of its 59 references that are in the map. First posted on arXiv 24 Sep 2026.

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41 of 59 references.

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  1. 2024LegalBench-RAG: A Benchmark for Retrieval-Augmented Generation in the Legal Domain19 Aug
  2. 2024CBR-RAG: Case-Based Reasoning for Retrieval Augmented Generation in LLMs for Legal Question Answering4 Apr
  3. 2023Interpretable Long-Form Legal Question Answering with Retrieval-Augmented Large Language Models29 Sep

Other references · 38

  1. 2020Language Models are Few-Shot Learnerscited by 32,199
  2. 2021LoRA: Low-Rank Adaptation of Large Language Modelscited by 14,084
  3. 2022Chain-of-Thought Prompting Elicits Reasoning in Large Language Modelscited by 12,302
  4. 2020A Simple Framework for Contrastive Learning of Visual Representationscited by 11,979
  5. 2020Retrieval-Augmented Generation for Knowledge-Intensive NLP Taskscited by 9,160
  6. 2019Sentence-BERT: Sentence Embeddings using Siamese BERT-Networkscited by 9,049
  7. 2025DeepSeek-R1: Incentivizing Reasoning Capability in LLMs via Reinforcement Learningcited by 6,146
  8. 2019Parameter-Efficient Transfer Learning for NLPcited by 4,195
  9. 2020Dense Passage Retrieval for Open-Domain Question Answeringcited by 3,779
  10. 2023QLoRA: Efficient Finetuning of Quantized LLMscited by 3,355
  11. 2021Pre-train, Prompt, and Predict: A Systematic Survey of Prompting Methods in Natural Language Processingcited by 2,222
  12. 2023Retrieval-Augmented Generation for Large Language Models: A Surveycited by 2,185
26 more
  1. 2023Self-RAG: Learning to Retrieve, Generate, and Critique through Self-Reflectioncited by 1,800
  2. 2022Rethinking the Role of Demonstrations: What Makes In-Context Learning Work?cited by 1,413
  3. 2021BEIR: A Heterogenous Benchmark for Zero-shot Evaluation of Information Retrieval Modelscited by 1,225
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  16. 2020How Does NLP Benefit Legal System: A Summary of Legal Artificial Intelligencecited by 128
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  18. 2023LQ-LoRA: Low-rank Plus Quantized Matrix Decomposition for Efficient Language Model Finetuningcited by 92
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  25. 2025Advancing Risk and Quality Assurance: A RAG Chatbot for Improved Regulatory Compliancecited by 4
  26. 2026Domain-Adaptation through Synthetic Data: Fine-Tuning Large Language Models for German Lawcited by 1

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