financial risk analysts

Abstract: The rapid expansion of digital banking and mobile financial services creates growing challenges for fraud detection, particularly under severe class imbalance and operational constraints. This study presents an explainable and adaptive machine-learning framework integrating chronological evaluation, leakage-conscious feature engineering, probability calibration, SHAP-based explainability, and adaptive risk prioritization. Experiments use the synthetic PaySim mobile-money benchmark and compare Logistic Regression, Random Forest, XGBoost, and LightGBM. XGBoost achieved the strongest fixed-threshold performance, with PR-AUC of 0.5658, ROC-AUC of 0.9068, and F1-score of 0.5369. Platt calibration reduced the test Brier score from 0.1141 to 0.0245, improving probability reliability. SHAP analysis identified temporal, destination-account, transaction-type, and amount features as important model drivers. An adaptive top-1% policy reduced false positives from 192 to 117, but recall declined from 0.4236 to 0.2122, demonstrating a clear alert-capacity trade-off. The results provide a reproducible methodological framework rather than evidence of deployment performance in Bangladesh, since PaySim is synthetic. Validation using governed real-world financial data is therefore an important direction for future research.

Abstract: Background: Understanding individual predictions in complex tabular models remains challenging, as existing additive frameworks like SHAP and LIME often obscure structural logic by absorbing nonlinear interactions into individual feature scores. Exposing these latent interaction structures is essential for automated auditing in high-stakes environments where understanding the logic of model behavior is as essential as predictive accuracy. Methods: To address this limitation, we introduce the localized case-based feature importance (CBFI) framework. Unlike traditional numerical attribution, our method decomposes instance-specific predictions into structurally distinct components, effectively separating independent main effects (G1) from pure interactions (G4) to capture explicit feature synergies and provide a principled approach for diagnosing feature combinations. Results: Comprehensive experiments on wine quality classification and medical insurance regression demonstrate that localized CBFI successfully disentangles complex interactions hidden by additive models. Furthermore, fidelity tests and synthetic ground-truth benchmarks confirm that the identified interactions correspond precisely to the nonlinear structural dependency patterns embedded in complex architectures, including gradient boosting and deep neural networks, thereby successfully shifting the explainable AI paradigm from simple numerical attribution to the recovery of interaction-driven contributions.

Abstract: With the rapid development of modern scientific research, tensor data have become increasingly prevalent across a wide range of fields. How to effectively characterize the relationship between tensor predictors and a response while preserving the intrinsic structure of tensor data has therefore become an important problem in high-dimensional statistical analysis. Existing tensor regression methods mainly focus on conditional means or conditional quantiles. When the response distribution is asymmetric, heavy-tailed, or contaminated by outlying observations, the conditional modal provides a robust and interpretable alternative characterization. In this paper, we propose a partial modal tensor regression (PMTR) method. The proposed method constructs the partial modal tensor covariance, which incorporates information on the conditional modal to guide tensor dimension reduction, and subsequently establishes a modal tensor regression model in the reduced tensor space. This strategy alleviates the dimensionality burden caused by direct vectorization while preserving the intrinsic structural information of tensor predictors. Under suitable regularity conditions, we establish the consistency and asymptotic properties of the proposed estimators and employ a data-driven dimension-selection procedure to determine the effective dimension along each tensor mode.

Abstract: Causal discovery from nonlinear multivariate time series is challenging in high-dimensional systems, where the number of candidate directed relations grows quadratically with the number of variables. Existing methods are often limited by target-wise model fitting, repeated conditional testing, or expensive graph-search procedures. We propose SCDM, a shared-parameter meta-learning framework for scalable temporal causal discovery. SCDM treats each target variable as a task while learning a shared temporal predictor and a shared causal-strength matrix across tasks. Each meta-episode updates only a subset of target-variable tasks, allowing the model to accumulate structural evidence across the full system without exhaustive target-wise optimization. After training, a post-training graph readout converts the learned predictor into continuous directed causal scores for threshold-independent evaluation. We also provide a finite-error recovery principle showing that, under fully observed delayed-system assumptions and a positive risk-gap condition, thresholding SCDM scores recovers the graph when statistical, meta-optimization, and readout errors are below the population margin. Experiments on controlled synthetic, neuroimaging-inspired, high-dimensional, and real-world temporal benchmarks demonstrate competitive causal recovery and improved scalability in large temporal systems.

Abstract: Autoregressive foundation models offer state-of-the-art capabilities to simulate the market by generating the message flow of limit order books (LOBs). Yet, without understanding their inner workings, research directions are hard to narrow and practical use in real-world trading environments remains uncertain. This study therefore asks what these models actually learn about market microstructure. We find that, similarly to games where sequence models build an internal representation of the board, an 8.2M-parameter Mamba-3 state-space model trained autoregressively on the tokenized message stream of eight large-cap US equities learns an internal representation of the market and its dynamics. In particular, order-flow imbalance, a central driver of short-horizon price moves, is decodable at $R^2 \approx 0.59$, far above controls and baselines. This representation extends to unseen stocks, suggesting that these models learn general representations rather than ticker-specific patterns. The model also generalizes across metrics beyond order-flow imbalance: results hold across traded volume and volatility. Additionally, the representation is causally steerable: pushing the state along a feature's axis shifts the model's next-message beliefs as that feature implies, monotonically in dose, consistent with the emergence of a world model.

Abstract: Generator--critic trading systems pair an LLM-based trader that makes trading decisions with a red team agent that evaluates these decisions and provides feedback for revision. However, improving individual trading decisions does not ensure that both agents learn from experience and improve together over time. This raises an important question: how can the trader and red-Team select useful experience and learn from each other's evolving behavior? On one hand, experience that benefits decisions under one market condition may become ineffective or harmful under another. On the other hand, trading outcomes reflect both agents' actions, making it difficult to derive appropriate experience for each role. In this work, we propose ACE-Trader, an adversarial co-evolution trading framework. Specifically, we first develop separate context-dependent memory selectors that learn to identify useful experience for the current trading decision. Both selectors receive shared feedback from net-return differences between complete memory-assisted and memory-free trading pipelines, with online updates emphasizing recent outcomes. We further design a co-evolution mechanism that links role-specific memories through shared trading records. We use these records to evaluate the Red-Team's risk assessments and the effects of the Trader's revisions against realized market outcomes, then derive experience for their respective memories. By linking this experience to the corresponding records, we enable the Trader to improve its proposals based on prior critiques and the Red-Team to adjust its review focus as the Trader's behavior changes. Experiments on U.S. stock trading show that ACE-Trader outperforms all 22 active baselines in cumulative return and achieves the highest Sharpe ratio and lowest maximum drawdown across both active methods and passive benchmarks.

Abstract: Cox processes provide a principled Bayesian nonparametric framework for modeling event-based data through an underlying intensity function. However, existing inference methods for estimating the intensity typically rely on computationally expensive Markov chain Monte Carlo sampling or approximate inference techniques. In addition, to ensure tractability, these methods often define priors over indirect latent structures, making them challenging to interpret. In this paper, we introduce the Martingale Posterior Cox Process (MPCP), which recasts Bayesian intensity estimation as inference over unobserved events given the observed event history. This perspective avoids the need to define complex priors while retaining the flexibility of nonparametric modeling. We propose a scalable, GPU-friendly copula-based predictive update, and provide strong theoretical guarantees for the convergence of the predictive resampling algorithm. Empirically, we show that MPCP provides excellent performance in both simulations and real data at a fraction of the computational cost of competing Bayesian approaches.

Abstract: Conformal prediction (CP) provides distribution-free coverage guarantees under exchangeability, but the efficiency of its prediction regions depends critically on the choice of the conformity score. This is particularly important in multivariate regression, where dependencies across output dimensions induce complex joint uncertainty structures. This paper introduces CoCoNet (Convex Conformal Network) for learning convex conformity scores that induce flexible, data-adaptive prediction regions. CoCoNet learns the score from held-out data by optimizing prediction-region efficiency while enforcing convexity with respect to the residual. CoCoNet then applies split-conformal calibration to retain finite-sample coverage guarantees. The paper presents two variants of the method: CoCoNet$_{\mathrm{Spline}}$, based on piecewise-linear scores, and CoCoNet$_{\mathrm{ICNN}}$, based on Input Convex Neural Networks. Experiments compare CoCoNet with other CP baselines over synthetic and real-world datasets with output dimensions ranging from 2 to 16. The results demonstrate the flexibility of CoCoNet in learning different response types. Across 8 models and 30 multi-dimensional regression tasks, CoCoNet$_\text{ICNN}$ and CoCoNet$_{\mathrm{Spline}\text{-}\ell_1}$ achieve the best efficiencies with average ranks of 1.45 and 2.75, respectively. In particular, CoCoNet$_\text{ICNN}$ ranks first on 22 tasks out of 30 in terms of efficiency.

Abstract: Many language-based applications require probabilities over a finite set of decisions rather than open-ended responses. We present Chinese Decision, a family of Chinese-language models for single-pass probabilistic decision-making. Given context, an instruction, and candidate descriptions, the model extracts final-position candidate-letter logits in one forward pass and normalizes them over valid options, without autoregressive answer generation. A shared interface supports Boolean judgments, categorical choices, and ordinal scores. We report a completed 0.8B model trained with distribution cross-entropy on 13.048 million decisions and preliminary 2B checkpoints trained with an additional RLCD objective. On the full CJ-Bench of 307,900 decisions, the uncalibrated 0.8B model achieves 72.24% general-domain accuracy and 76.98% average accuracy across medicine, law, and finance using a single checkpoint, with 1.07% overall expected calibration error. The 2B model reaches 72.56% general-domain accuracy after 40.13% of one epoch but has not surpassed the completed 0.8B model on the professional-domain average. We further evaluate a validation-temperature-scaled deployment model and its Q8 quantization, finding close aggregate performance while documenting individual prediction changes. We release the training, evaluation, and deployment pipeline. The current results establish a reproducible approach to Chinese probabilistic decisions but do not isolate the effect of model scale.

Abstract: Standard Bayesian experimental design (BED) methods assume the experimenter alone will act on the data, choosing the best action given their own beliefs and goals. In practice, data are often acted on by external parties whose procedures the experimenter cannot change and may not know, particularly when the data are released publicly. To extend BED to such settings, we introduce usage-aware experimental design, a framework in which an adaptive design policy is trained to minimise the usage risk: the experimenter's expected loss when one or more external rules act on the collected data. These rules may be non-Bayesian or black-box, and when several may apply, we either average over them or take the worst case. We show that, unlike in standard BED, more informative data can be harmful under such rules, so the usage risk cannot in general be expressed as an expected uncertainty reduction; our framework thus strictly generalises standard BED. We then use it to tackle a range of problems that are difficult to address with existing approaches.

Abstract: The task of constructing a predictor that is simultaneously accurate under multiple evaluation metrics has been popularized recently under the name omniprediction. Prior work in this area has largely focused on binary prediction tasks, and existing results for multiclass and continuous outcomes typically suffer from slow error rates. In this paper, we consider forecasts expressed as a set of quantiles over a discrete but otherwise arbitrary set of probability levels. We develop sample-efficient algorithms for constructing forecasts that are accurate simultaneously across all proper losses that satisfy mild regularity conditions, where proper losses are those minimized by predicting the true quantiles. Our algorithms are online and can operate in a dynamic environment, while simultaneously taking multiple losses into account, and their forecasts offer the potential to provide diverse end-users with rich information for evaluating risk and informing a range of practical decision-making tasks. As an example, we demonstrate how our procedure can be used to ensemble quantile forecasts of COVID-19 hospitalizations made by experts during the pandemic.

Abstract: Kernel Mean Matching (KMM) estimates risk under covariate shift by reweighting labelled source samples so that their kernel mean embedding matches that of unlabeled target samples. Existing finite-sample guarantees are usually stated for independent samples, although many applications involve temporal, spatial, or clustered dependence. We give a finite-sample KMM analysis under dependent sampling by replacing nominal sample sizes with effective sample sizes in the concentration steps used by the classical proof. The approach uses Bernstein inequalities for geometrically strongly mixing processes and derives a model-based effective sample size. The resulting bound separates overlap, dependence, and smoothness effects with specific constants derived under a Gaussian process assumption. This analysis yields an additional tradeoff: smoother losses preserve more input dependence and therefore reduce effective sample size, while also reducing function complexity and empirical-to-population risk gaps. Applying the result to prediction yields confidence intervals that achieve near-nominal coverage in synthetic experiments and substantially reduce undercoverage on real monitoring data.

Abstract: Selection bias is a difficult yet widespread problem in causal discovery, occurring whenever non-random selection processes lead to data that is not representative of the underlying populations. Due to its practical importance, related works have been proposed to address the problem under local [Versteeg et al., 2022] or interventional settings [Dai et al., 2025a], but general algorithms for observational data remain elusive. In this paper, we focus on truncated data (hard selection), and provide a general result for Additive Noise Models (ANM). We show that score-based methods are a surprisingly suitable candidate due to a special property of the score function ($\nabla \log p(x)$): deterministic truncation preserves both the score of the joint distribution as well as the Jacobian of the score. While established score-matching algorithms still fail in most settings, we actively leverage this observation to propose a new method for causal discovery that is robust under truncated data with ANMs. Overall, our approach offers a general, robust solution that is agnostic to external information about the selection process and still achieves comparable performance to the state-of-the-art approaches when selection is not present.

Abstract: Entities in real-world systems often evolve over time: users shift between information consumption patterns, researchers migrate between fields, and firms transition between financial risk states. When such systems are modeled as dynamic graphs, these transitions correspond to nodes whose class labels change between consecutive snapshots, which we call shifters. Correctly classifying shifters is often more consequential than classifying stable nodes with persistent labels, as detecting such transitions enables timely intervention in high-stakes settings. Yet, we identify a systematic failure mode across all major dynamic graph neural network architectures: shifter performance consistently lags behind stable nodes, with errors concentrated on the old label. Our structural analysis traces this failure to embedding inertia: neighborhood aggregation keeps shifter representations anchored to the old-class centroid, and this effect is strongest precisely where it is hardest to correct, namely for shifters whose neighborhoods remain aligned with the old class. Guided by this finding, we propose CHASE, a model-agnostic CHange-Aware framework for Shifting nodEs that wraps any dynamic GNN with targeted components for detecting label shifts and overriding stale neighborhood signals. CHASE consistently improves shifter performance across all tested models and datasets (up to 114.9% and 202.5% improvement on accuracy and F1 score, respectively) while preserving stable-node performance. We additionally contribute three dynamic graph benchmarks with naturally shifting labels, filling a gap in existing resources. The source code is available at https://github.com/jhkim611/CHASE

Abstract: Time series (TS) anomaly detection (AD) lacks a universal detector, with the best choice determined by the series rather than by the algorithm. Existing methods therefore either select one detector for each series or average a pool of them. However, both assume that no label ever arrives, while a deployed monitor does receive them, since an operator confirms the alarms it raises. In this paper, we propose ONESHOT, which uses a single confirmed anomaly to weight the pool rather than to choose one detector from it. Specifically, we score each detector on the confirmed anomaly, and those scores become the weights of a soft mixture over the whole pool. We show that a single confirmed anomaly is enough to come close to the best detector for the series. Across 152 univariate and 73 multivariate series, ONESHOT outperforms the strongest single detector, averaging the whole pool, and even picking the best detector on the confirmed event. Code is available at: https://github.com/seunghan96/one_shot.

Abstract: Expectiles are tail-sensitive distributional summaries with important applications in financial risk measurement and forecasting, yet statistical theory for their online estimation from dependent data remains limited. We study a one-pass, stochastic-gradient algorithm with constant learning rate $γ$ for estimating the marginal expectile of a stationary causal process. The recursion admits a unique stationary causal solution and geometrically forgets its initialization. Under short-range dependence, its last iterate is asymptotically Gaussian at the $\sqrtγ$ scale, with variance governed by the population curvature and the long-run variance of the expectile score. For long-memory linear processes the scale changes to $γ^{β-1/2}\ell(1/γ)$, with a Gaussian limit arising from a fractional Brownian motion integral. We further derive the joint long-memory limit for multiple expectile levels and characterize its limiting covariance structure. Various numerical experiments corroborate the predicted Gaussian approximations and regime-specific fluctuation scales.

Abstract: Linear models can predict well in complex domains even when underlying mechanisms are nonlinear. We argue that this can occur because the complexity of the world exceeds the complexity that can be learned reliably from finite, partially observed data. Flexible models can exploit curvature, thresholds, and interactions that fit one hospital, period, population, policy setting, or measurement process but fail elsewhere. When this instability lies mainly in the nonlinear component, omitting it can give linear models lower prediction error in a new environment. We connect this claim to work on simple linear rules, bias and variance, regularization, best linear prediction, measurement error, distribution shift, invariance, Rashomon sets, and underspecification. Proposition 1 gives a simple squared-error case in which a nonlinear rule learned in the training environment raises target error because it transfers too weakly; finite-sample estimation error can strengthen this result. Partial observation alone is not enough: the link between observed variables and unobserved factors must vary across environments. Stable nonlinear structure favors flexible models, and linear models remain vulnerable to linear spurious relationships. Model complexity should therefore be chosen by cross-environment stability as well as training-data accuracy.

Abstract: Continuous-time latent state-space models are widely used for irregularly observed time series, typically representing uncertainty through a random initial state followed by smooth ordinary differential equation (ODE) dynamics, or Brownian perturbations accumulated by a stochastic differential equation (SDE). While these constructions are natural for smooth or diffusive systems, they do not directly encode a finite set of unobserved shocks whose timing, magnitude, and effect on memory are themselves uncertain. We instead introduce latent jump models (LJMs): the latent state follows closed-form deterministic dynamics between Poisson-driven event times and undergoes a learned instantaneous jump at each event, with state-dependent intensity and mark distributions. This defines a time-homogeneous Markov process whose jumps are intrinsic state transitions rather than numerical integration steps. For training, we derive a tractable event-augmented path-space evidence lower bound (ELBO) and introduce Scan-Parallel Variational Inference (SPVI): an observation-conditioned variational posterior samples the complete latent event configuration before the state recurrence is evaluated using triangular affine scans. This enables fast and scalable training for LJMs in logarithmic temporal depth. Across synthetic stochastic systems and real irregular time series, LJMs remain competitive with continuous-time latent baselines in forecast accuracy, often with fewer latent updates than numerical solver evaluations, while training one to two orders of magnitude faster than the sequential baselines.

Abstract: Industrial risk-control systems typically rely on structured-data models for efficient prediction, yet substantial valuable information remains embedded in unstructured long text. Extracting this information through manual feature engineering is labor-intensive, while requiring a large language model (LLM) to process every real-time input may not meet practical deployment requirements. To address this challenge, we propose LLM-BlockFE, an LLM-guided offline feature construction framework that converts long text into executable feature programs, thereby avoiding LLM calls during online inference. LLM-BlockFE constructs feature programs by incrementally appending immutable code blocks and evaluates candidate features using a downstream model. To address the tendency of conventional greedy search to become trapped in suboptimal solutions, our method introduces a block-level rollback mechanism based on depth-calibrated credit allocation and advances multiple independent search trajectories in an interleaved manner, reducing redundant exploration by sharing fixed descriptions of each trajectory's exploration direction. After the search, the resulting programs are frozen and deployed to extract structured features for downstream prediction models. Across two public and two private datasets, LLM-BlockFE achieves absolute AUC improvements of 0.0069 to 0.0358 over the strongest baseline on each dataset in the full-dataset comparison. Post-launch monitoring across five deployed financial risk-control applications shows absolute KS improvements of 0.02 to 1.56 percentage points over the existing manually designed strategy.

Abstract: Conformal prediction offers a distribution-free coverage guarantee, making it especially attractive for clinical applications. Standard conformal prediction, however, provides such guarantees only at the population level, and its prediction sets can exhibit coverage disparities across clinically important subgroups. A natural remedy is to calibrate within predefined groups. However, this can require access to sensitive subgroup attributes and is prone to a worst-group bottleneck: protecting the most difficult subgroup can inflate prediction sets for all, increasing cognitive burden on decision makers. To this end, we propose Stochastic Grouping Conformal Prediction (SGCP), a conformal framework for subgroup-reliable uncertainty quantification. It learns a stochastic grouping map that allows each sample to draw calibration information from others with similar calibration behavior, yielding a local score law that boosts reliability across subpopulations. We prove that SGCP retains the standard coverage guarantee. Experiments on synthetic and real-world benchmarks show that it consistently reduces subgroup coverage gaps while achieving smaller or comparable prediction set sizes relative to existing baselines.

Abstract: Tabular data underpin prediction and decision-making in medicine, finance, government and science, but often contain sensitive individual-level information, creating a need for accurate prediction while preserving privacy. Traditional private learning provides formal privacy guarantees, but requires slow dataset-specific optimisation, suffers substantial utility loss under strong privacy, and is often difficult to apply correctly. Tabular foundation models adapt rapidly to new datasets, but existing models lack formal privacy guarantees, and are highly vulnerable to membership-inference attacks, limiting their use on sensitive data. Here we introduce PrivTab, an easy to use tabular foundation model for differentially private classification that embeds a privacy mechanism within its architecture. Pretrained on simulated datasets, PrivTab uses in-context learning to transform sensitive rows into compact, provably private summaries---effectively learning how to learn under privacy. PrivTab outperforms private linear and neural-network baselines under moderate-to-strong privacy, shows negligible membership leakage, maintains well-calibrated predictions under strong privacy, and reduces dataset fitting time by 10,000 times, requiring only a single forward pass. By combining formal privacy, speed, and easy of use, PrivTab brings recent advances in AI to applications where sensitive individual-level data have limited their adoption.

Abstract: Small multiple time series visualizations are often used for real-time data monitoring tasks in high-impact domains such as healthcare and manufacturing. Effective design is critical because users rely on these visualizations to monitor data from many entities, such as patients or machines, often while distracted. Users may need to rapidly appraise current values for each entity, monitoring for those that go outside an acceptable range, while also watching temporal trends. However, no design guidelines currently exist for visually emphasizing current values in historical time series represented by small multiples. Via an iterative design process informed by a review of related literature and theory on visual channels and emphasis, we present a design space for glanceable time series small multiple displays. We evaluate this space through two online empirical studies, testing against non-threshold and threshold rapid appraisal tasks. Our results provide insights into merging current value and historical data visualizations for rapid appraisal tasks in time series monitoring. For non-threshold tasks, we found that size encodings on the current value, spatially integrated into the line chart, may provide a good compromise, with 28% response time improvement for tasks involving finding large current values and minimal interference with trend lookup tasks. More generally, integrated designs outperformed separated designs (in which the current value representation is spatially separated from the historical trend line). For threshold tasks, color threshold encodings significantly outperformed shaded band encodings. All supplemental materials are available at https://osf.io/wzf6a.

Abstract: Many real-world datasets exhibit unusually large values far more frequently than predicted by Gaussian models. Heavy-tailed distributions capture this behavior, yet evaluating learning performance under them remains challenging because rare, large feature entries retain non-vanishing effects even in high dimensions. Even in the canonical setting of empirical risk minimization for linear regression with entry-wise i.i.d. symmetric $α$-stable data, a precise asymptotic characterization of prediction has been lacking. In this work, we introduce a functional order parameter that describes the random effective problem associated with each coefficient. Using the replica method, we fully characterize the generalization error in the proportional high-dimensional limit where the sample size and feature dimension diverge at a fixed ratio. Additionally, this analysis establishes a heavy-tail universality law, scaling laws relating typical errors to prediction reliability, and the Bayes-optimal prediction error. In addition to characterizing the effects of extreme entries on the learning process, our method applies broadly to other systems with persistent local heterogeneity.

Abstract: Classification problem in the context of highly imbalanced data is a major challenge in many real-world applications (e.g., FinTech, healthcare, etc.). In these cases, the vast majority of instances belong to a single class and a small fraction represent the minority class (often the most critical class). Recently, diffusion models have emerged as powerful approaches to reduce the degree of ``imbalanced-ness'' in the dataset; they work by generating synthetic data by capturing complex data distributions using iterative transformations. However, standard diffusion models are not inherently suited to highly skewed or heavy-tailed data, due to inbuilt quadratic error loss, which lacks the structural sensitivity to capture rare, extreme values, and minority-class nuances. We propose a novel approach, namely, Quantile-TabDDPM, based on a quantile-regularized denoising objective that combines the standard quadratic error loss with a quantile loss term to explicitly capture rare events while preserving the theoretical grounding of the original denoising objective. We extensively evaluated our approach on a real-world credit card transaction dataset characterized by extreme class imbalance. The results demonstrate that the integration of diffusion-based synthetic data generation with a quantile-regularized denoising objective provides a robust and effective framework for fraud detection in highly imbalanced datasets.

Abstract: Fully homomorphic encryption allows arithmetic to be carried out on encrypted values, so that a party performing a computation need not see the data it operates on. This is useful wherever collaborating parties or sites cannot share data records or computed summaries yet need to do a joint analysis. We demonstrate the protocols needed to perform such analyses reproducibly via two packages in R, a platform widely used for applied statistics. The first, openfhe.R, is an interface to the OpenFHE C++ library, which exposes exact integer arithmetic (BFV, BGV), approximate real-valued arithmetic (CKKS), Boolean circuits, and multiparty key generation. The second is homomorpheR, which builds a small set of master/worker primitives for multi-party protocols on top of the first. Together, the two let an ordinary R statistical routine compose with an encrypted-arithmetic layer at the function-value boundary, provided the quantity crossing that boundary decomposes as a sum over sites. Two validation studies are presented: distributed stratified Cox regression, where stats4::mle() converges through an encrypted channel, and federated Cox-lasso via convex optimization using consensus ADMM, where the cross-site update is the only encrypted step. We also discuss federated similarity retrieval and two-party prediction. Throughout, the parties are assumed honest-but-curious, and threshold key generation removes the assumption that any single party holds a usable secret key.

Abstract: Causal representation learning for time-series data aims to identify latent states and their causal relations from observations. In this setting, an important challenge is to model both lagged causal relations across observation intervals and faster causal effects that appear as instantaneous relations within an interval, while accounting for nonstationarity in time-series data. However, methods that jointly handle these causal relations and nonstationarity remain limited. To address this gap, we establish sufficient conditions for identifying latent states up to component permutation and component-wise invertible transformations, and their instantaneous and lagged causal structures up to the same permutation, using an observed auxiliary variable, such as time or a condition label, associated with changes in transition-noise distributions. Based on these results, we propose iCReN, a framework that uses contrastive learning with discrete or continuous auxiliary variables to learn latent representations and estimate their instantaneous and lagged causal structures. Experiments demonstrate accurate recovery of latent states and both instantaneous and lagged causal structures on synthetic data and the utility of the learned representations for downstream forecasting on real-world data.

Abstract: Scalable nonlinear causal discovery requires methods that combine flexible mechanism estimators with efficient search over large graph spaces. Several algorithmic families have been proposed to address this challenge, yet their accuracy-runtime trade-offs remain poorly understood. We empirically compare the four major approaches: differentiable structure learning, amortized structure learning, score-matching, and combinatorial search. Our results reveal complementary bottlenecks: differentiable and amortized methods scale well but exhibit an accuracy gap, score-matching methods can be accurate in low dimensions but degrade quickly for increasing feature sizes, and combinatorial methods remain accurate but are slowed by repeated and redundant local scoring. Motivated by this bottleneck, we develop SPADE, a spline-based score-evaluation scheme that compiles sufficient statistics once and reuses them throughout combinatorial search. Under bounded indegree, its Gaussian variant reduces algorithmic complexity from O(nd^3) to O(nd^2+d^3). Empirically, SPADE shifts the observed scalability-accuracy frontier by orders of magnitude: it solves 100-variable problems with 160K samples in seconds and 1600-variable problems with 2.5K samples in minutes, while retaining high structural accuracy across synthetic and real-world benchmarks. These results reveal a substantial shift in the practical scale of combinatorial search and highlight the importance of evaluating scalable causal-discovery methods along the full accuracy-runtime frontier.

Abstract: Gaussian Processes (GPs) are a powerful tool for modelling and quantifying uncertainty in functional relationships. However, they require practitioners to make a number of design decisions, such as the choice of the kernel and the observation model. Suboptimal choices can produce misspecified models that do not capture the underlying data generating process. We introduce Predictively Oriented Gaussian Processes (PrO-GPs), which treat predictive uncertainty as the primary inferential target and provide a robust alternative to standard GPs. Although direct computation of a PrO posterior for nonparametric models is intractable, we derive a reduced formulation and practical sampling scheme for efficient computation. Through synthetic and real data experiments, we show that PrO-GPs produce better calibrated predictive distributions under model misspecification compared to standard GP approaches.

Abstract: In many industrial applications, 1) tabular data is scarce and imbalanced and thus requires synthetic expansion; 2) input distributions drift between training and deployment (covariate shift); 3) validation sets often diverge from unseen test environments; or 4) standard generative models simply mimic outdated source distributions. This learning setting limits the stability of standard augmentation and adaptation pipelines. We generalize the task under such setting as the Augmented and Weighted Learning under Covariate Shift problem (AWL-CS). AWL-CS imposes two critical challenges on existing methods: 1) misleading generative guidance where models optimize for source similarity rather than downstream task relevance, and 2) structural instability of distributional density where reweighting mechanisms overfit to noisy validation signals. To tackle these challenges, we propose IGDPR (Invariant-Guided Diffusion with Prototype Reweighting), a unified framework that synergizes stable synthesis and structural adaptation: i) To achieve task-relevant generation, we steer the diffusion sampling process using invariant potentials to ensure synthetic samples align with stable decision boundaries rather than outdated correlations. ii) To ensure stable adaptation, we develop a prototype-based reweighting strategy that assesses sample reliability through structural clusters instead of isolated points, effectively filtering validation noise. Extensive experiments on real data demonstrate our method improves data quality by augmenting the most beneficial data for robust learning.

Abstract: Causal Normalizing Flows (CNFs) enable causal inference from observational data given the causal structure, but they assume fully observed training data. We introduce MissCNF, which trains CNFs directly on incomplete data by maximizing the marginal likelihood of each partially observed sample, without discarding rows or constructing a completed dataset. Thanks to the causal structure encoded in the autoregressive factorization of CNFs, only missing variables in the ancestral closure of the observed set are integrated out, while the others are dropped without computation. We further establish the conditions under which MissCNF recovers the true joint distribution, and introduce \emph{causal-family positivity}, where identification is possible even when no record in the dataset is ever complete. We compare MissCNF with two common strategies for handling missing data: listwise deletion and impute-then-fit pipelines. Across eight synthetic causal benchmarks, three missingness mechanisms, and missing rates up to $90\%$, MissCNF achieves the lowest KL divergence in 23 of 24 nonlinear MCAR and MAR settings and in all nonlinear MNAR settings, as well as the lowest counterfactual error in 20 of 24 settings. On linear SCMs, where linear imputation performs best, MissCNF ranks in the top two in 22 of 24 settings.

Abstract: Relational deep learning models database rows and foreign-key links as a heterogeneous graph for prediction from record attributes and relational context. These graphs contain two distinct temporal signals: record age changes with the prediction cutoff, while intervals between observed records remain fixed. Prior work often treats time as a single signal or studies temporal representation and pretraining separately. We investigate how explicitly encoding both signals affects temporal pretraining for downstream tasks. Our framework combines Multi-scale Time Encoding, which captures record age using learnable time scales and type-specific projections, with Rotary Time Encoding, which represents signed inter-record intervals through rotary transformations during graph propagation. We pair these encodings with three self-supervised objectives: historical relation recovery, horizon-aware future relation activity prediction, and temporal subgraph contrast. All inputs respect their observation cutoffs. Pretraining proceeds in two stages: subgraph contrast first learns neighborhood representations, followed by refinement through either relation recovery or future activity prediction. We evaluate on five RelBench datasets across 11 classification and regression tasks using heterogeneous GNN and graph Transformer backbones. With both encodings, the best evaluated staged schedules improve over supervised training with the same encodings by 3.02% and 1.06% on the two backbones, respectively, and over controls without pretraining or either encoding by 3.24% and 2.37%.

Abstract: AI advice increasingly enters human decision workflows before costly information acquisition and final action. This paper studies how such advice affects decision quality, measured by the gross utility of the final action. Advice shifts beliefs before the decision maker chooses an acquisition experiment with uniformly posterior-separable (UPS) costs. The analysis characterizes gross effects through the continuation gross value generated by net-optimal acquisition. Convexity of this value function is necessary and sufficient for every AI signal to weakly improve gross utility at every prior, while nonconvexity allows a binary signal to cause gross harm. The criterion gives tight state-space results. Every AI signal is weakly gross-improving in binary-state problems under arbitrary actions, payoffs, and UPS costs. A minimal three-state problem can generate gross harm through concentrated shutdown, where valuable acquisition stops. For classification problems with Shannon acquisition costs, the criterion becomes an active-set slope test. It guarantees weak gross improvement for homogeneous classification and all three-state weighted classification problems, while a minimal four-state failure arises from attention dilution, where acquisition shifts away from high-stake distinctions. Along a Blackwell-increasing mixture path, gross utility can first decrease and then increase. With endogenous interpretation, cheaper interpretation can reduce gross utility.

Abstract: Synthetic tabular data generation provides an effective alternative for the training of machine learning models when real-world data is limited or inaccessible. However, the heterogeneous, non-smooth, and incomplete nature of tabular data poses fundamental challenges to conventional probabilistic and deep generative models, where their interpretability remains limited. This paper proposes a novel fuzzy distribution modeling methodology for synthetic tabular data generation based on fuzzy sets theory. Feature distributions are represented using fuzzy sets and feature dependencies are modeled through Fuzzy Cognitive Maps, resulting in a low-parameter, and an interpretable data representation. Synthetic samples are generated by sampling fuzzy concepts rather than raw values, enabling native support for mixed data types, missing values, and domain constraints. The methodology further supports linguistic queries and IF-THEN reasoning, facilitating transparent simulation of decision-making processes. Experimental results on benchmark datasets demonstrate competitive performance with respect to utility, fidelity and privacy compared to state-of-the-art methods, while offering substantially improved interpretability. These results establish fuzzy distribution modeling as a principled and effective approach for synthetic tabular data generation in fuzzy systems and decision support applications.

Abstract: In many high-stakes applications, machine learning is dominated by black-box models that require post hoc explanations to justify their predictions. These explanations are often unreliable because they do not reflect the model's actual computations, limiting accountability and trust. A natural alternative is to use models that are interpretable by design. However, existing rule-based approaches, such as RuleFit and decision trees, while transparent, often lack stability and predictive strength, reinforcing a perceived trade-off between traditional performance measures and model understandability. To address this, we propose Sparse Relaxed Regularized Regression Rule-Fit (SR4-Fit), an intrinsically interpretable algorithm for both classification and regression that produces compact and stable rule sets without sacrificing performance. Using demographic data from the U.S. Census Bureau's American Community Survey, SR4-Fit predicts U.S. House election outcomes with high accuracy and interpretability while uncovering demographic interactions missed by black-box models. We further validate SR4-Fit across fourteen benchmark datasets (six classification and eight regression), where it outperforms existing rule-based methods, including RuleFit and decision trees in terms of accuracy, stability, and compactness while remaining competitive with black-box models in predictivity. These results demonstrate that interpretability and predictive reliability need not be mutually exclusive, offering a practical and transparent alternative for high-stakes decision-making.

Abstract: Time series anomaly detection (TSAD) remains challenging not only because anomaly labels are scarce, but also because temporal anomalies are highly context-dependent. Existing methods often rely on unsupervised objectives or surrogate abnormal patterns, providing limited supervision for context-dependent normal--anomalous distinctions. We propose Context-Anchored Pair Supervision (CAPS), a supervision-recovery framework for TSAD. CAPS views ideal anomaly supervision as a matched comparison between normal and anomalous outcomes under the same temporal context, and seeks to recover such supervision without target-domain anomaly labels. Using simulated normal--anomalous pairs, CAPS learns structure and anomaly-semantic representations through reconstruction, background consistency, and within-pair counterfactual recombination. The resulting anomaly representations form a continuous semantic space with coarse modes and induce a sampleable multimodal prior. CAPS conditionally realizes sampled semantics as residual-form effects on target reference trajectories. The resulting context-anchored normal--anomalous counterparts provide temporal supervision for discriminative detector learning. Experiments on nine datasets show that CAPS achieves the strongest aggregate performance across all four evaluation metrics among the compared methods, while complementary ablations and transfer analyses support the roles of context anchoring, semantic disentanglement, and conditional realization.

Abstract: Causal tabular foundation models amortize effect estimation across synthetic mechanisms, but latent-effect supervision rewards posterior shrinkage instead of directly encoding the repeated-sample response needed in a fixed deployment population. We introduce fluctuation-supervised pretraining (FSP): each synthetic table is labeled by its average treatment effect plus its efficient influence-function fluctuation, while deployment remains a single frozen forward pass. Along the path $T_{λ,P}=θ(P)+λP_nψ_P$, we prove an endpoint transition: every fixed $λ<1$ retains label ambiguity of order $(1-λ)^2/n$, whereas full fluctuation makes the Gaussian label observable and reduces optimal finite-stratum causal label-prediction risk to order $n^{-2}$. One finite-pretraining bound combines label, network, episode-sampling, and optimization errors; its resulting sampling defect controls fixed-mechanism bias, mean squared error, variance, Gaussian approximation, and, with variance-head accuracy, studentized coverage. Complementary lower bounds separate the local $n^{-1}$ ATE risk that deployment observations cannot erase from the $\log N/M$ excess risk of a generic finite-dictionary episode-learning problem. Experiments trace the learned sampling response. With a raw-row/column backbone, FSP reduces large-effect-shift RMSE by 69.8% relative to latent supervision and by 39.5% relative to a released CausalPFN checkpoint on matched tables. Continuous-covariate experiments, known-effect semisynthesis and two randomized-study evaluations separate sampling-law fidelity from point-risk shrinkage and expose weak-overlap errors in both learned heads.

Abstract: Time Series Foundation Models (TSFMs) promise a paradigm shift toward zero-shot forecasting by eliminating task-specific training. However, existing works often overlook trade-offs between predictive accuracy and probabilistic calibration. This paper presents a benchmark study of six TSFMs evaluated on energy, traffic, and financial datasets. We contrast their performance against statistical baselines and a supervised DL model. The study reveals that while TSFMs outperform statistical methods and supervised models, they are subject to a fundamental trade-off between point accuracy and probabilistic reliability. Specifically, xLSTM architectures provide robust probabilistic calibration across horizons. In contrast, patch-based transformers offer competitive accuracy but face calibration issues at long horizons, while transformer-based models exhibit context saturation points for optimal zero-shot reasoning. These findings offer evidence-based guidance for balancing generalization and uncertainty quantification in real-world deployments.

Abstract: Random forests (RFs) predict well but are opaque, whereas single decision trees are interpretable but unstable. Artificial representative trees (ARTs) were developed as interpretable surrogate models for RFs, but their use as standalone prediction models with uncertainty quantification has not been systematically investigated. We combine ARTs with leaf-wise Mondrian conformal predictive systems (CPS), enabling a single tree to provide continuous predictions, prediction intervals, and probabilities of exceeding arbitrary thresholds. We compared ARTs with CPS against decision trees with CPS and separate regression and probability trees across five simulation scenarios, 21 benchmark datasets, and a cross-sectional NHANES example data set. Repeated cross-validation assessed predictive performance, interpretability, and stability. ARTs with CPS yield compact, structurally stable trees with substantially more reproducible split-variable selection than decision trees across benchmark datasets and NHANES. Decision trees showed slightly better predictive performance and narrower prediction intervals, while coverage was broadly comparable. CPS-based trees generally achieved lower and less variable Brier scores than multi-model approaches. Combining ARTs with CPS therefore provides a single, interpretable, and stable model for continuous predictions and calibrated probabilities, balancing predictive performance with reproducibility and transparency in settings where stability and interpretability are essential.

Abstract: Unobserved confounding is a fundamental challenge in causal inference from observational data. This article develops a mixture-learning perspective, viewing latent confounders as sources of heterogeneity that induce mixture structure in observed data. Under suitable structural and identifiability assumptions, recovering the mixing distribution and component mechanisms enables estimation of interventional distributions and causal estimands. Using variants of Bernoulli mixtures as a running example, we contextualize mixture-learning techniques and their structural assumptions, and connect them to causal inference in panel-data settings, including latent factor models and synthetic interventions.We then consider high-dimensional exponential-family mixtures with dependent outcome trajectories, moving beyond counterfactual means to model counterfactual distributions. We situate this perspective relative to complementary approaches for unobserved confounding. Together, these ideas provide a bridge between mixture learning and causal inference, connecting recent advances in high-dimensional mixture learning to scalable identification and estimation of causal effects while raising new challenges for mixture learning.

Abstract: The interpretability of complex machine learning models is of paramount importance, especially in real-world high-stakes domains such as healthcare and finance. However, existing post-hoc interpretability methods suffer from inherent limitations: fragmented analytical processes, inadequate capacity to model nonlinear feature interactions, computational inefficiencies, and over-reliance on specific model architectures. To address these challenges, this paper provides a novel method - Adaptive Derivative-Ordered Random Explanation (ADORE) - that leverages first- and second-order derivatives to accommodate nonlinear model complexities, while enabling effective capture of feature-sample interactions within a unified analytical framework. ADORE integrates global feature importance with local sample contributions, precisely quantifying feature impact by capturing both magnitude and direction, and identifying critical samples influencing model decisions. Furthermore, it achieves computational efficiency through randomized singular value decomposition (SVD) and dynamic sparsity detection, making it scalable to large, high-dimensional datasets. Experiments across three data modalities - tabular, text, and image - demonstrate that ADORE outperforms existing methods such as LIME and SHAP in handling complex interactions and computational efficiency, while providing detailed and reliable explanations. To facilitate adoption and reproducibility, ADORE has been released as an open-source Python package, hosted on GitHub, enabling researchers and practitioners to readily adapt and apply our approach to their specific tasks, models, and datasets.

Abstract: CounterFactual Examples (CFEs) are a cornerstone of eXplainable Artificial Intelligence (XAI), offering local, post hoc, and model-agnostic explanations by identifying minimal input modifications that alter a model's prediction. Yet, in order to be intelligible, these modifications must also be semantically meaningful to the explainee. This paper proposes to integrate knowledge expressed as a fuzzy linguistic vocabulary to represent the explainee's perception and interpretation of the data. The domain induced by this fuzzy vocabulary imposes structural constraints that make the features dependent, preventing the use of gradient-based optimisation methods for CFE generation, e.g., DiCE. The paper proposes a continuous data embedding in this linguistic domain and exploits it to define a variant of DiCE that allows personalisation for the explainee, named DiCEf. As illustrated by experimental results on a real-world dataset, this extension of the DiCE method enables the generation of CFEs that are linguistically perceptible while preserving cost minimality, sparsity, and diversity.

Abstract: Conformal prediction provides distribution-free uncertainty quantification under exchangeability. However, this assumption is violated by label shift, where the marginal distribution of labels changes while the conditional distribution of inputs given labels remains stable. Under such shifts, standard conformal procedures no longer maintain their intended coverage behavior. Existing approaches address this via importance weighting. They pair the reweighting with residual-based nonconformity scores that ignore predictive uncertainty. The resulting intervals have uniform width. Bayesian conformal methods produce adaptive intervals by leveraging predictive distributions. They evaluate conformity under the source predictive, which is misaligned with the target domain under label shift. We propose the \emph{Label-Shift-Adjusted Bayesian Score} (LSA score), a nonconformity score derived from a posterior predictive tilting identity. This identity shows that the target predictive is an importance-weighted transformation of the source predictive. We use it to derive a direct correction to the Bayesian score. We evaluate the method on molecular property prediction under controlled label shift. The LSA score consistently yields shorter intervals than residual-based and source-based Bayesian scores. Coverage in the target domain remains comparable. Under stronger shift, all methods incur some coverage loss due to pseudo-label-based density-ratio estimation. The LSA score is defined for any source predictive with a tractable log-density. We instantiate it with Bayesian Ridge Regression, where the correction admits a closed form.

Abstract: We develop Gaussian approximation bounds in higher-order Wasserstein distance $W_p$, $p\geq2$, for sums of multivariate martingale differences generated by a uniformly ergodic Markov chain. Under an $L^{(2+η)p}$-moment condition with $η>0$, we establish the explicit bound $$ O\left( p^3 \|A\|_4^2 + pd^{1/4}\|A\|_2^{1/2}\|A\|_4^2 \right) $$ where $A\in\mathbb{R}^n$ collects the $L^{(2+η)p}$-sizes of the $n$ individual martingale increments. In the balanced-increment regime where the individual increments have comparable sizes of order $n^{-1/2}$, it yields the first optimal $O(n^{-1/2})$ Gaussian approximation rate for fixed $p$ and $d$. Consequently, we also obtain the first optimal $O(n^{-1/2})$ $W_p$ Gaussian approximation rate for multivariate additive functionals of uniformly ergodic Markov chains. Our analysis develops two techniques for addressing the interplay between higher-order Wasserstein distance and temporal dependence. First, building on the Ornstein--Uhlenbeck relative-score approach of Fang and Koike (2023), we formulate the bound in terms of antisymmetric Stein couplings while retaining the conditional tensor structure. Second, we develop a refresh-then-maximal coupling that combines an independent first-step resampling, which preserves the desired Stein identity, with a subsequent maximal coupling that provides effective control of the coupling increment. These tools may be useful more broadly for Gaussian approximation under temporal dependence.

Abstract: A wrong number is worse than no answer. Across factuality-critical domains -- audience metrics, scheduling and rights in media; dosages and lab values in healthcare; figures and citations in finance and legal -- a confident but fabricated value is more damaging than an honest admission of uncertainty. Yet this is the dominant failure mode we observe on small local language models: even when correct evidence is present in context, models fabricate plausible numbers and timestamps. Recent work characterizes a real limit of this regime: below 7B parameters, the bottleneck of retrieval-augmented generation (RAG) is not retrieval quality but context utilization. We present Noesis, the deterministic-first query plane of the Noesis architecture, which makes every deterministic judgment before generation. Its mechanisms follow from the ingestion architecture (subject of a separate patent application): (a) a producer-side fact layer rendering precomputed metric facts verbatim without ranking; (b) positional addressing with deterministic cross-source alignment, resolved ahead of query time at zero LLM cost; (c) provenance scoping as an attribution constraint with multi-tier named-reference routing; and (d) two-tier context with model-triggered verbatim hydration. Across four ablations, a 2B model reaches parity with a 35B model on factual integrity (exact values in all runs; zero confabulated numbers on absent-entity traps); structured retrieval beats flat RAG by +11.4 points at 2B; skeleton-only context preserves quantitative answers at 20-30% smaller prompts; and hydration recovers verbatim narrative in ~8s versus ~29s. Two properties matter for regulated domains: each query resolves in a single generation call, and every reported value is traceable to its exact source and position by construction.