arXiv · arXiv q-fin · 2025
Synthetic financial data provides a practical solution to the privacy, accessibility, and reproducibility challenges that often constrain empirical research in quantitative finance. This paper investigates the use of deep generative models, specifically Time-series Generative Adversarial Networks (TimeGAN) and Variational Autoencoders (VAEs) to generate realistic synthetic financial return series for portfolio constr…
Christophe D. Hounwanou, Yae Ulrich Gaba
arXiv · arXiv · 2026
Foundation models have transformed domains from language to genomics by learning general-purpose representations from large-scale, heterogeneous data. We introduce TradeFM, a 524M-parameter generative Transformer that brings this paradigm to market microstructure, learning directly from billions of trade events across >9K equities. To enable cross-asset generalization, we develop scale-invariant features and a univer…
Maxime Kawawa-Beaudan, Srijan Sood, Kassiani Papasotiriou, Daniel Borrajo, Manuela Veloso
arXiv · arXiv · 2026
We develop a rigorous mathematical framework for the governance of systems of K self-adapting generative AI models under the principles of Model Risk Management (MRM). When multiple models share a meta-learning coupling through an interaction matrix, the per-agent Lyapunov analysis that underpins standard MRM is provably insufficient: individual agents can each satisfy their declared stability bounds while the joint …
Sriram Nagaraj
arXiv · arXiv · 2026
Deep generative models are increasingly used as simulators for downstream decision-making under data scarcity, but in risk-sensitive applications their usefulness depends on rare adverse scenarios rather than typical samples. Standard generative objectives prioritize bulk distributional fidelity, leaving low-probability tails vulnerable to localized optimization noise and making tail-dependent functionals unstable un…
Shuning Zhao, Patrick Wong, Leran Zhang, Xiaolin Hu
arXiv · arXiv · 2026
Generative artificial intelligence is moving from general-purpose experimentation toward specialized applications across banking, capital markets, insurance, payments, and wealth management. Its main contribution is not limited to conversational interfaces. Modern generative systems can synthesize large document collections, extract information from unstructured data, generate software and analytical code, create sce…
Dennis Mao, Alessandra Lin, Yixin Kang, Yiqing Wang
arXiv · arXiv · 2026
This paper introduces a novel generative framework for synthesising forward-looking, càdlàg stochastic trajectories that are sequentially consistent with time-evolving path-law proxies, thereby incorporating anticipated structural breaks, regime shifts, and non-autonomous dynamics. By framing path synthesis as a sequential matching problem on restricted Skorokhod manifolds, we develop the \textit{Anticipatory Neural …
Daniel Bloch
arXiv · arXiv · 2026
Scaling generative inverse and forward rendering to real-world scenarios is bottlenecked by the limited realism and temporal coherence of existing synthetic datasets. To bridge this persistent domain gap, we introduce a large-scale, dynamic dataset curated from visually complex AAA games. Using a novel dual-screen stitched capture method, we extracted 4M continuous frames (720p/30 FPS) of synchronized RGB and five G-…
Zheng-Hui Huang, Zhixiang Wang, Jiaming Tan, Ruihan Yu, Yidan Zhang
arXiv · arXiv · 2026
Denoising diffusion probabilistic models (DDPMs) have emerged as powerful generative models for complex distributions, yet their use in arbitrage-free derivative pricing remains largely unexplored. Financial asset prices are naturally modeled by stochastic differential equations (SDEs), whose forward and reverse density evolution closely parallels the forward noising and reverse denoising structure of diffusion model…
Nilay Tiwari
arXiv · arXiv · 2026
This paper evaluates the causal impact of Generative Artificial Intelligence (GenAI) adoption on productivity and systemic risk in the U.S. banking sector. Using a novel dataset linking SEC 10-Q filings to Federal Reserve regulatory data for 809 financial institutions over 2018--2025, we employ two complementary identification strategies: Dynamic Spatial Durbin Models (DSDM) to capture network spillovers and Syntheti…
Tatsuru Kikuchi
arXiv · arXiv · 2025
This paper investigates how Large Language Models (LLMs) from leading providers (OpenAI, Google, Anthropic, DeepSeek, and xAI) can be applied to quantitative sector-based portfolio construction. We use LLMs to identify investable universes of stocks within S&P 500 sector indices and evaluate how their selections perform when combined with classical portfolio optimization methods. Each model was prompted to select and…
Alina Voronina, Oleksandr Romanko, Ruiwen Cao, Roy H. Kwon, Rafael Mendoza-Arriaga
arXiv · arXiv · 2025
We present a generative framework for pricing European-style basket options by learning the conditional terminal distribution of the log arithmetic-weighted basket return. A Mixture Density Network (MDN) maps time-varying market inputs encoded via truncated path signatures to the full terminal density in a single forward pass. Traditional approaches either impose restrictive assumptions or require costly re-simulatio…
Hasib Uddin Molla, Antony Ware, Ilnaz Asadzadeh, Nelson Mesquita Fernandes
arXiv · arXiv · 2025
Generative modeling of high-frequency limit order book (LOB) dynamics is a critical yet unsolved challenge in quantitative finance, essential for robust market simulation and strategy backtesting. Existing approaches are often constrained by simplifying stochastic assumptions or, in the case of modern deep learning models like Transformers, rely on tokenization schemes that affect the high-precision, numerical nature…
Yang Li, Zhi Chen
arXiv · arXiv · 2025
This article explores the potential of generative AI (GenAI) to support actuarial practice through four implemented case studies. It situates these case studies within the broader evolution of artificial intelligence in actuarial science, from early neural networks and machine learning to modern transformer-based GenAI systems. The first case study illustrates how large language models (LLMs) can improve claim cost p…
Simon Hatzesberger, Iris Nonneman
arXiv · arXiv · 2025
The rapid expansion of cross-border e-commerce (CBEC) has created significant opportunities for small- and medium-sized sellers, yet financing remains a critical challenge due to their limited credit histories. Third-party logistics (3PL)-led supply chain finance (SCF) has emerged as a promising solution, leveraging in-transit inventory as collateral. We propose an advanced credit risk management framework tailored f…
Qingkai Zhang, L. Jeff Hong, Houmin Yan
arXiv · arXiv · 2025
Enterprise Resource Planning (ERP) systems serve as the digital backbone of modern financial institutions, yet they continue to rely on static, rule-based workflows that limit adaptability, scalability, and intelligence. As business operations grow more complex and data-rich, conventional ERP platforms struggle to integrate structured and unstructured data in real time and to accommodate dynamic, cross-functional wor…
Hongyang Yang, Likun Lin, Yang She, Xinyu Liao, Jiaoyang Wang
arXiv · arXiv · 2025
The success of OpenAI's ChatGPT in 2023 has spurred financial enterprises into exploring Generative AI applications to reduce costs or drive revenue within different lines of businesses in the Financial Industry. While these applications offer strong potential for efficiencies, they introduce new model risks, primarily hallucinations and toxicity. As highly regulated entities, financial enterprises (primarily large U…
Anwesha Bhattacharyya, Ye Yu, Hanyu Yang, Rahul Singh, Tarun Joshi
arXiv · arXiv · 2024
This study explores the application of generative adversarial networks in financial market supervision, especially for solving the problem of data imbalance to improve the accuracy of risk prediction. Since financial market data are often imbalanced, especially high-risk events such as market manipulation and systemic risk occur less frequently, traditional models have difficulty effectively identifying these minorit…
Mohan Jiang, Yaxin Liang, Siyuan Han, Kunyuan Ma, Yuan Chen
arXiv · arXiv · 2024
Generative models aim to simulate realistic effects of various actions across different contexts, from text generation to visual effects. Despite significant efforts to build real-world simulators, the application of generative models to virtual worlds, like financial markets, remains under-explored. In financial markets, generative models can simulate complex market effects of participants with various behaviors, en…
Junjie Li, Yang Liu, Weiqing Liu, Shikai Fang, Lewen Wang