Financial and economic news is continuously monitored by financial market participants. According to the efficient market hypothesis, all past information is reflected in stock prices and new information is instantaneously absorbed in determining future stock prices. Hence, prompt extraction of positive or negative sentiments from news is very important for investment decision-making by traders, portfolio managers and investors. Sentiment analysis models can provide an efficient method for extracting actionable signals from the news. However, financial sentiment analysis is challenging due to domain-specific language and unavailability of large labeled datasets. General sentiment analysis models are ineffective when applied to specific domains such as finance. To overcome these challenges, we design an evaluation platform which we use to assess the effectiveness and performance of various sentiment analysis approaches, based on combinations of text representation methods and machine-learning classifiers. We perform more than one hundred experiments using publicly available datasets, labeled by financial experts. We start the evaluation with specific lexicons for sentiment analysis in finance and gradually build the study to include word and sentence encoders, up to the latest available NLP transformers. The results show improved efficiency of contextual embeddings in sentiment analysis compared to lexicons and fixed word and sentence encoders, even when large datasets are not available. Furthermore, distilled versions of NLP transformers produce comparable results to their larger teacher models, which makes them suitable for use in production environments.

Rapid technological developments in the last decade have contributed to using machine learning (ML) in various economic sectors. Financial institutions have embraced technology and have applied ML algorithms in trading, portfolio management, and investment advising. Large-scale automation capabilities and cost savings make the ML algorithms attractive for personal and corporate finance applications. Using ML applications in finance raises ethical issues that need to be carefully examined. We engage a group of experts in finance and ethics to evaluate the relationship between ethical principles of finance and ML. The paper compares the experts’ findings with the results obtained using natural language processing (NLP) transformer models, given their ability to capture the semantic text similarity. The results reveal that the finance principles of integrity and fairness have the most significant relationships with ML ethics. The study includes a use case with SHapley Additive exPlanations (SHAP) and Microsoft Responsible AI Widgets explainability tools for error analysis and visualization of ML models. It analyzes credit card approval data and demonstrate that the explainability tools can address ethical issues in fintech, and improve transparency, thereby increasing the overall trustworthiness of ML models. The results show that both humans and machines could err in approving credit card requests despite using their best judgment based on the available information. Hence, human-machine collaboration could contribute to improved decision-making in finance. We propose a conceptual framework for addressing ethical challenges in fintech such as bias, discrimination, differential pricing, conflict of interest, and data protection.

Lexicon-based sentiment analysis in finance leverages specialized, manually annotated lexicons created by human experts to extract sentiment from financial texts effectively. Although lexicon-based methods are simple to implement and fast to operate on textual data, they require considerable manual annotation efforts to create, maintain, and update the lexicons. These methods are also considered inferior to the deep learning-based approaches, such as transformer models, which have become dominant in various natural language processing (NLP) tasks due to their remarkable performance. However, their efficacy comes at a cost: these models require extensive data and computational resources for both training and testing. Additionally, they involve significant prediction times, making them unsuitable for real-time production environments or systems with limited processing capabilities. In this paper, we introduce a novel methodology named eXplainable Lexicons (XLex) that combines the advantages of both lexicon-based methods and transformer models. We propose an approach that utilizes transformers and SHapley Additive exPlanations (SHAP) for explainability to automatically learn financial lexicons. Our study presents four main contributions. Firstly, we demonstrate that transformer-aided explainable lexicons can enhance the vocabulary coverage of the benchmark Loughran-McDonald (LM) lexicon. This enhancement leads to a significant reduction in the need for human involvement in the process of annotating, maintaining, and updating the lexicons. Secondly, we show that the resulting lexicon outperforms the standard LM lexicon in sentiment analysis of financial datasets. Our experiments show that XLex outperforms LM when applied to general financial texts, resulting in enhanced word coverage and an overall increase in classification accuracy by 0.431. Furthermore, by employing XLex to extend LM, we create a combined dictionary, XLex+LM, which achieves an even higher accuracy improvement of 0.450. Thirdly, we illustrate that the lexicon-based approach is significantly more efficient in terms of model speed and size compared to transformers. Lastly, the proposed XLex approach is inherently more interpretable than transformer models. This interpretability is advantageous as lexicon models rely on predefined rules, unlike transformers, which have complex inner workings. The interpretability of the models allows for better understanding and insights into the results of sentiment analysis, making the XLex approach a valuable tool for financial decision-making.

Over the last decade, machine learning methods have revolutionized a large number of domains and provided solutions to many problems that people could hardly solve in the past. The availability of large amounts of data, powerful processing architectures, and easy-to-use software frameworks have made machine learning a popular, readily available, and affordable option in many different domains and contexts. However, the development and maintenance of production-level machine learning systems have proven to be quite challenging, as these activities require an engineering approach and solid best practices. Software engineering offers a mature development process and best practices for conventional software systems, but some of them are not directly applicable to the new programming paradigm imposed by machine learning. The same applies to the requirements engineering best practices. Therefore, this article provides an overview of the requirements engineering challenges in the development of machine learning systems that have been reported in the research literature, along with their proposed solutions. Furthermore, it presents our approach to overcoming those challenges in the form of a case study. Through this mixed-method study, the article tries to identify the necessary adjustments to (1) the best practices for conventional requirements engineering and (2) the conventional understanding of certain types of requirements to better fit the specifics of machine learning. Moreover, the article tries to emphasize the relevance of properly conducted requirements engineering activities in addressing the complexity of machine learning systems, as well as to motivate further discussion on the requirements engineering best practices in developing such systems.

Even though named entity recognition (NER) has seen tremendous development in recent years, some domain-specific use-cases still require tagging of unique entities, which is not well handled by pre-trained models. Solutions based on enhancing pre-trained models or creating new ones are efficient, but creating reliable labeled training for them to learn on is still challenging. In this paper, we introduce PharmKE, a text analysis platform tailored to the pharmaceutical industry that uses deep learning at several stages to perform an in-depth semantic analysis of relevant publications. The proposed methodology is used to produce reliably labeled datasets leveraging cutting-edge transfer learning, which are later used to train models for specific entity labeling tasks. By building models for the well-known text-processing libraries spaCy and AllenNLP, this technique is used to find Pharmaceutical Organizations and Drugs in texts from the pharmaceutical domain. The PharmKE platform also incorporates the NER findings to resolve co-references of entities and examine the semantic linkages in each phrase, creating a foundation for further text analysis tasks, such as fact extraction and question answering. Additionally, the knowledge graph created by DBpedia Spotlight for a specific pharmaceutical text is expanded using the identified entities. The obtained results with the proposed methodology result in about a 96% F1-score on the NER tasks, which is up to 2% better than those of the fine-tuned BERT and BioBERT models developed using the same dataset. The ultimate benefits of the platform are that pharmaceutical domain specialists may more easily identify the knowledge extracted from the input texts thanks to the platform’s visualization of the model findings. Likewise, the proposed techniques can be integrated into mobile and pervasive systems to give patients more relevant and comprehensive information from scanned medication guides. Similarly, it can provide preliminary insights to patients and even medical personnel on whether a drug from a different vendor is compatible with the patient’s prescription medication.