Interpretable vs Learned Encoders for High-Cardinality Fraud Detection

A total of seven categorical encoding methods were tested on the IEEE-CIS fraud benchmark dataset (590,540 records, 3.5% positives, 8 high-cardinality columns). The encoders were evaluated using a stratified 5-fold cross-validation (CV) with three repetitions. Five of the encoders had identical frozen LightGBM learners in the downstream phase, allowing for controlled comparisons of their performance to each other. CatBoost and TabNet were included as comparisons across paradigms using different learners. The entity embeddings produced the highest AUC-ROC (0.9612), with a statistically significant tie with that of CatBoost (0.9602) and statistically superior to tier group encoding (0.9548), whereas target encoding was only 0.0023 worse than tier group encoding and the auditor-friendly tier boundaries were maintained. Off-the-shelf TabNet did not outperform tree-based pipelines and collapsed under data scarcity. On AUC-PR, CatBoost leads (0.822 vs. 0.793); no encoder dominated both metrics. Per-column analysis confirmed the embedding advantage arises from joint multi-column representation.

Interpretable Factor Decomposition for Decision Intelligence in Large-Scale Financial Markets: Evidence from China's A-Share Market

We present an interpretable machine learning pipeline to decompose Cross-Sectional Equity Return Predictability into auditable factor contribution. We apply an XGBoost model with TreeSHAP attribution and conduct stress testing on 3632 Chinese A-share stocks from 2009 until 2019. Using 60-month, rolling windows over 55 months of out-of-sample data, XGBoost obtains a mean AUC of 0.547 and +2.38%/month (Newey-West t = 5.94; Annualized Sharpe 2.23) long-short spread for the top vs bottom quintiles. This alpha is persistent after adjusting for the Carhart four-factor model (+2.31%/month; t = 7.48). SHAP Decomposition indicates that behavioral signals (turnover and momentum) account for 58.2% of predictive attribution compared to 10.7% for valuation ratios, on average, across 55 industry groups. Ablation analysis serves to cross-validate this ranking and provides evidence that SHAP and ablation diverge in a manner that highlights feature substitutability structure that is largely invisible to either method used in isolation.

Reflect-Guard: Enhancing LLM Safeguards against Adversarial Prompts via Logical Self-Reflection

Large language model (LLM) safety classifiers such as Llama Guard are effective at detecting overtly harmful prompts but remain vulnerable to adversarial jailbreak attacks that disguise malicious intent through role-play scenarios, fictional framing, and indirect requests. We present Reflect-Guard, a method that augments LLM-based safety classifiers with chain-of-thought self-reflection capabilities through parameter-efficient fine-tuning. Our approach distills analytical reasoning from GPT-4o-mini into structured reflection annotations, then trains Llama-Guard-3-8B via QLoRA to generate logical self-reflections before issuing safety verdicts. Using only 1000 training examples and updating just 0.5% of model parameters (~42M), Reflect-Guard achieves substantial improvements on two challenging benchmarks. On WildGuardTest, F1 score improves from 0.770 to 0.842 (+7.2 pp), with recall on adversarial prompts increasing from 0.513 to 0.921 (+40.8 pp). On JailbreakBench, the attack success rate drops from 10.3% to 1.8%, representing an 82.5% relative reduction. These gains are especially pronounced on adversarial inputs, where the explicit reasoning step enables the model to see through obfuscation techniques that defeat standard pattern-matching approaches. Our results demonstrate that teaching safety classifiers to reason about adversarial intent, rather than simply classify surface patterns, is a promising direction for robust LLM safety.