Chong Hui Tan

The rapid adoption of large language models (LLMs) in financial services has generated a growing literature on “responsible AI” in domains such as investment analysis, credit assessment, risk management, compliance, and financial advisory systems. Unlike earlier AI systems, LLMs introduce responsibility challenges that differ in important ways from those addressed by earlier responsible AI frameworks, including hallucinations, prompt injection and manipulation, generative opacity, instruction-following failures, context sensitivity, output inconsistency, and emergent capabilities that arise only at larger model scales. While responsible AI concerns extend across AI systems more broadly, this review focuses specifically on LLMs, which since 2022 have become a major technological force reshaping financial services and have generated a distinctive body of responsibility discourse that existing frameworks are only beginning to address. However, the meaning of responsibility in this literature remains heterogeneous and inconsistently operationalized across studies. This paper provides a structured review of research on responsible LLMs in finance using a broad-to-narrow screening process across Web of Science and Scopus, reported with reference to the applicable PRISMA 2020 items. We combine a descriptive bibliometric overview with qualitative content analysis to examine the corpus. The descriptive overview covers publication trends, publication venues, disciplinary orientations, geographic distributions, and institutional affiliations, while the qualitative analysis codes the corpus on two dimensions: responsibility depth—whether responsibility is constitutive of the paper’s contribution, operative within its design, or peripheral to its framing—and responsibility mode—whether that engagement is normative, technical, evaluative, or mixed. The findings reveal a field concentrated in the Operative–Technical mode. Constitutive contributions cluster in Normative and Mixed modes, while a purely Evaluative orientation remains comparatively uncommon. Addressing these limitations requires moving beyond principle-level discourse toward institution-specific accountability mechanisms, empirical evaluation across clearly documented research and operational settings, and systematic alignment with relevant financial regulatory requirements. These efforts must address the distinctive challenges posed by LLMs, rather than only concerns inherited from the broader responsible AI literature.

In modern financial markets, decision-makers increasingly rely on quantitative methods to navigate complex trade-offs among multiple, often conflicting objectives. This paper addresses constrained multi-objective optimization (MOO) with an application to portfolio optimization for minimizing risk and maximizing return. To this end, and to address existing gaps, we propose a novel reinforcement learning (RL)-guided non-dominated sorting genetic algorithm II (NSGA-II) enhanced with gray relational coefficients (GRC), termed RL-NSGA-II-GRC, which combines an RL agent controller and GRC-based selection to improve the convergence and diversity of the Pareto-optimal fronts. The agent adapts key evolutionary parameters online using population-level metrics of hypervolume, feasibility, and diversity, while the GRC-enhanced tournament operator ranks parents via a unified score simultaneously considering dominance rank, crowding distance, and geometric proximity to ideal reference. We evaluate the framework on the Kursawe and CONSTR benchmark problems and on a NASDAQ portfolio optimization application. On the benchmarks, RL-NSGA-II-GRC achieves convergence metric improvements of about 5.8% and 4.4% over the original NSGA-II, while preserving a well-distributed set of non-dominated solutions. In the portfolio application, the method produces a smooth and densely populated efficient frontier that supports the identification of the maximum Sharpe ratio portfolio (with annualized Sharpe ratio = 1.92), as well as utility-optimal portfolios for different risk-aversion levels. The main contributions of this work are three-fold: (1) we propose an RL-NSGA-II-GRC method that integrates an RL agent into the evolutionary framework to adaptively control key parameters using generational feedback; (2) we design a GRC-enhanced binary tournament selection operator that provides a comprehensive performance indicator to efficiently guide the search toward the Pareto-optimal front; (3) we demonstrate, on benchmark MOO problems and a NASDAQ portfolio case study, that the proposed method delivers improved convergence and well-populated efficient frontiers that support actionable investment insights.