Research Papers

Trade-offs in Financial AI: Explainability in a Trilemma with Accuracy and Compliance

Patricia Marcella Evite, Ekaterina Svetlova, Doina Bucur

As Artificial Intelligence (AI) becomes increasingly embedded in financial decision-making, the opacity of complex models presents significant challenges for professionals and regulators. While the field of Explainable AI (XAI) attempts to bridge this gap, current research often reduces the implementation challenge to a binary trade-off between model accuracy and explainability. This paper argues that such a view is insufficient for the financial domain, where algorithmic choices must navigate a complex sociotechnical web of strict regulatory bounds, budget constraints, and latency requirements. Through semi-structured interviews with twenty finance professionals, ranging from C-suite executives and developers to regulators across multiple regions, this study empirically investigates how practitioners prioritize explainability relative to four competing factors: accuracy, compliance, cost, and speed. Our findings reveal that these priorities are structured not as a simple trade-off, but as a system of distinct prerequisites and constraints. Accuracy and compliance emerge as non-negotiable "hygiene factors": without them, an AI system is viewed as a liability regardless of its transparency. Operational levers (speed and cost) serve as secondary constraints that determine practical feasibility, while ease of understanding functions as a gateway to adoption, shaping whether AI tools are trusted, used, and defensible in practice.

Accurate currency recognition is essential for assistive technologies, particularly for visually impaired individuals who rely on others to identify banknotes. This dependency puts them at risk of fraud and exploitation. To address these challenges, we first build a new Bangladeshi banknote dataset that includes both controlled and real-world scenarios, ensuring a more comprehensive and diverse representation. Next, to enhance the dataset's robustness, we incorporate four additional datasets, including public benchmarks, to cover various complexities and improve the model's generalization. To overcome the limitations of current recognition models, we propose a novel hybrid CNN architecture that combines MobileNetV3-Large and EfficientNetB0 for efficient feature extraction. This is followed by an effective multilayer perceptron (MLP) classifier to improve performance while keeping computational costs low, making the system suitable for resource-constrained devices. The experimental results show that the proposed model achieves 97.95% accuracy on controlled datasets, 92.84% on complex backgrounds, and 94.98% accuracy when combining all datasets. The model's performance is thoroughly evaluated using five-fold cross-validation and seven metrics: accuracy, precision, recall, F1-score, Cohen's Kappa, MCC, and AUC. Additionally, explainable AI methods like LIME and SHAP are incorporated to enhance transparency and interpretability.

Understanding causal relationships among features is fundamental for explaining machine learning model decisions. However, traditional causal discovery methods face challenges with categorical variables due to numerical instability in conditional independence testing. We propose a dual-encoding causal discovery approach that addresses these limitations by running constraint-based algorithms with complementary encoding strategies and merging results through majority voting. Applied to the Titanic dataset, our method identifies causal structures that align with established explainable methods.

The medical adoption of NLP tools requires interpretability by end users, yet traditional explainable AI (XAI) methods are misaligned with clinical reasoning and lack clinician input. We introduce CHiRPE (Clinical High-Risk Prediction with Explainability), an NLP pipeline that takes transcribed semi-structured clinical interviews to: (i) predict psychosis risk; and (ii) generate novel SHAP explanation formats co-developed with clinicians. Trained on 944 semi-structured interview transcripts across 24 international clinics of the AMP-SCZ study, the CHiRPE pipeline integrates symptom-domain mapping, LLM summarisation, and BERT classification. CHiRPE achieved over 90% accuracy across three BERT variants and outperformed baseline models. Explanation formats were evaluated by 28 clinical experts who indicated a strong preference for our novel concept-guided explanations, especially hybrid graph-and-text summary formats. CHiRPE demonstrates that clinically-guided model development produces both accurate and interpretable results. Our next step is focused on real-world testing across our 24 international sites.

Explainable AI (XAI) is commonly applied to anomalous sound detection (ASD) models to identify which time-frequency regions of an audio signal contribute to an anomaly decision. However, most audio explanations rely on qualitative inspection of saliency maps, leaving open the question of whether these attributions accurately reflect the spectral cues the model uses. In this work, we introduce a new quantitative framework for evaluating XAI faithfulness in machine-sound analysis by directly linking attribution relevance to model behaviour through systematic frequency-band removal. This approach provides an objective measure of whether an XAI method for machine ASD correctly identifies frequency regions that influence an ASD model's predictions. By using four widely adopted methods, namely Integrated Gradients, Occlusion, Grad-CAM and SmoothGrad, we show that XAI techniques differ in reliability, with Occlusion demonstrating the strongest alignment with true model sensitivity and gradient-+based methods often failing to accurately capture spectral dependencies. The proposed framework offers a reproducible way to benchmark audio explanations and enables more trustworthy interpretation of spectrogram-based ASD systems.

Supply chains (SCs), complex networks spanning from raw material acquisition to product delivery, with enterprises as interconnected nodes, play a pivotal role in organizational success. However, optimizing SCs remains challenging, particularly in partner selection, a key bottleneck shaped by competitive and cooperative dynamics. This challenge constitutes a multi-objective dynamic game requiring a synergistic integration of Multi-Criteria Decision-Making and Game Theory. Traditional approaches, grounded in mathematical simplifications and managerial heuristics, fail to capture real-world intricacies and risk introducing subjective biases. Multi-agent simulation offers promise, but prior research has largely relied on fixed, uniform agent logic, limiting practical applicability. Recent advances in LLMs create opportunities to represent complex SC requirements and hybrid game logic. However, challenges persist in modeling dynamic SC relationships, ensuring interpretability, and balancing agent autonomy with expert control. We present SCSimulator, a visual analytics framework that integrates LLM-driven MAS with human-in-the-loop collaboration for SC partner selection. It simulates SC evolution via adaptive network structures and enterprise behaviors, which are visualized via interpretable interfaces. By combining CoT reasoning with XAI techniques, it generates multi-faceted, transparent explanations of decision trade-offs. Users can iteratively adjust simulation settings to explore outcomes aligned with their expectations and strategic priorities. Developed through iterative co-design with SC experts and industry managers, SCSimulator serves as a proof-of-concept, offering methodological contributions and practical insights for future research on SC decision-making and interactive AI-driven analytics. Usage scenarios and a user study demonstrate the system's effectiveness and usability.

From Toil to Thought: Designing for Strategic Exploration and Responsible AI in Systematic Literature Reviews

Runlong Ye, Naaz Sibia, Angela Zavaleta Bernuy +4

Systematic Literature Reviews (SLRs) are fundamental to scientific progress, yet the process is hindered by a fragmented tool ecosystem that imposes a high cognitive load. This friction suppresses the iterative, exploratory nature of scholarly work. To investigate these challenges, we conducted an exploratory design study with 20 experienced researchers. This study identified key friction points: 1) the high cognitive load of managing iterative query refinement across multiple databases, 2) the overwhelming scale and pace of publication of modern literature, and 3) the tension between automation and scholarly agency. Informed by these findings, we developed ARC, a design probe that operationalizes solutions for multi-database integration, transparent iterative search, and verifiable AI-assisted screening. A comparative user study with 8 researchers suggests that an integrated environment facilitates a transition in scholarly work, moving researchers from managing administrative overhead to engaging in strategic exploration. By utilizing external representations to scaffold strategic exploration and transparent AI reasoning, our system supports verifiable judgment, aiming to augment expert contributions from initial creation through long-term maintenance of knowledge synthesis.

Concept Bottleneck Models (CBMs) improve the explainability of black-box Deep Learning (DL) by introducing intermediate semantic concepts. However, standard CBMs often overlook domain-specific relationships and causal mechanisms, and their dependence on complete concept labels limits applicability in scientific domains where supervision is sparse but processes are well defined. To address this, we propose the Process-Guided Concept Bottleneck Model (PG-CBM), an extension of CBMs which constrains learning to follow domain-defined causal mechanisms through biophysically meaningful intermediate concepts. Using above ground biomass density estimation from Earth Observation data as a case study, we show that PG-CBM reduces error and bias compared to multiple benchmarks, whilst leveraging multi-source heterogeneous training data and producing interpretable intermediate outputs. Beyond improved accuracy, PG-CBM enhances transparency, enables detection of spurious learning, and provides scientific insights, representing a step toward more trustworthy AI systems in scientific applications.

Using Artificial Intelligence to improve teaching and learning benefits greater adaptivity and scalability in education. Knowledge Tracing (KT) is recognized for student modeling task due to its superior performance and application potential in education. To this end, we conceptualize and investigate counterfactual explanation as the connection from XAI for KT to education. Counterfactual explanations offer actionable recourse, are inherently causal and local, and easy for educational stakeholders to understand who are often non-experts. We propose KTCF, a counterfactual explanation generation method for KT that accounts for knowledge concept relationships, and a post-processing scheme that converts a counterfactual explanation into a sequence of educational instructions. We experiment on a large-scale educational dataset and show our KTCF method achieves superior and robust performance over existing methods, with improvements ranging from 5.7% to 34% across metrics. Additionally, we provide a qualitative evaluation of our post-processing scheme, demonstrating that the resulting educational instructions help in reducing large study burden. We show that counterfactuals have the potential to advance the responsible and practical use of AI in education. Future works on XAI for KT may benefit from educationally grounded conceptualization and developing stakeholder-centered methods.

On the Hardness of Computing Counterfactual and Semifactual Explanations in XAI

André Artelt, Martin Olsen, Kevin Tierney

Providing clear explanations to the choices of machine learning models is essential for these models to be deployed in crucial applications. Counterfactual and semi-factual explanations have emerged as two mechanisms for providing users with insights into the outputs of their models. We provide an overview of the computational complexity results in the literature for generating these explanations, finding that in many cases, generating explanations is computationally hard. We strengthen the argument for this considerably by further contributing our own inapproximability results showing that not only are explanations often hard to generate, but under certain assumptions, they are also hard to approximate. We discuss the implications of these complexity results for the XAI community and for policymakers seeking to regulate explanations in AI.

Neural networks are growing more capable on their own, but we do not understand their neural mechanisms. Understanding these mechanisms' decision-making processes, or mechanistic interpretability, enables (1) accountability and control in high-stakes domains, (2) the study of digital brains and the emergence of cognition, and (3) discovery of new knowledge when AI systems outperform humans. This paper traces how attention head intervention emerged as a key method for causal interpretability of transformers. The evolution from visualization to intervention represents a paradigm shift from observing correlations to causally validating mechanistic hypotheses through direct intervention. Head intervention studies revealed robust empirical findings while also highlighting limitations that complicate interpretation. Recent work demonstrates that mechanistic understanding now enables targeted control of model behaviour, successfully suppressing toxic outputs and manipulating semantic content through selective attention head intervention, validating the practical utility of interpretability research for AI safety.

Heart failure (HF) affects 11.8% of adults aged 65 and older, reducing quality of life and longevity. Preventing HF can reduce morbidity and mortality. We hypothesized that artificial intelligence (AI) applied to 24-hour single-lead electrocardiogram (ECG) data could predict the risk of HF within five years. To research this, the Technion-Leumit Holter ECG (TLHE) dataset, including 69,663 recordings from 47,729 patients, collected over 20 years was used. Our deep learning model, DeepHHF, trained on 24-hour ECG recordings, achieved an area under the receiver operating characteristic curve of 0.80 that outperformed a model using 30-second segments and a clinical score. High-risk individuals identified by DeepHHF had a two-fold chance of hospitalization or death incidents. Explainability analysis showed DeepHHF focused on arrhythmias and heart abnormalities. This study highlights the feasibility of deep learning to model 24-hour continuous ECG data, capturing paroxysmal events essential for reliable risk prediction. Artificial intelligence applied to single-lead Holter ECG is non-invasive, inexpensive, and widely accessible, making it a promising tool for HF risk prediction.