The Hidden Bias of Process Reward Models:PRISM for Rewarding the Right Reasoning

Process Reward Models (PRMs) improve credit assignment for reasoning by providing step-level feedback. However, we identify a hidden bias in PRMs caused by severe imbalance in step-level training data. Standard cross-entropy training amplifies this bias, causing PRMs to overcredit plausible but incorrect steps and produce high false-positive rates. We show that these false positives have an asymmetric downstream effect: false negatives mainly slow exploration, whereas false positives actively steer Best-of-N selection, guided decoding, and policy optimization toward flawed reasoning. This suggests that PRM training should shift from pointwise label fitting to reliable relative comparisons. To address this, we propose PRISM (Precision Ranking for Improved Step Modeling), a policy-aware PRM training framework that learns from contrastive step-level comparisons and hard negatives generated by a temporal lookahead strategy, requiring no new human labels. We further use a difficulty-aware curriculum to optimize the contrastive step margin. Across PRMBench and ProcessBench, PRISM substantially reduces false positives (22% on PRMBench) and improves macro F1 over strong discriminative PRMs. When applied to policy optimization and search tasks, including guided decoding and Best-of-N selection, it consistently improves accuracy (up to 22% for guided decoding and 33% for Best-of-N) and robustness. More broadly, trustworthy process supervision is not just about assigning high rewards, but about rewarding the right reasoning for the right reasons.

PersonaLedger: Generating Realistic Financial Transactions with Persona Conditioned LLMs and Rule Grounded Feedback

Strict privacy regulations limit access to real transaction data, slowing open research in financial AI. Synthetic data can bridge this gap, but existing generators do not jointly achieve behavioral diversity and logical groundedness. Rule-driven simulators rely on hand-crafted workflows and shallow stochasticity, which miss the richness of human behavior. Learning-based generators such as GANs capture correlations yet often violate hard financial constraints and still require training on private data. We introduce PersonaLedger, a generation engine that uses a large language model conditioned on rich user personas to produce diverse transaction streams, coupled with an expert configurable programmatic engine that maintains correctness. The LLM and engine interact in a closed loop: after each event, the engine updates the user state, enforces financial rules, and returns a context aware "nextprompt" that guides the LLM toward feasible next actions. With this engine, we create a public dataset of 30 million transactions from 23,000 users and a benchmark suite with two tasks, illiquidity classification and identity theft segmentation. PersonaLedger offers a realistic, privacy preserving resource that supports rigorous evaluation of forecasting and anomaly detection models. PersonaLedger offers the community a rich, realistic, and privacy preserving resource -- complete with code, rules, and generation logs -- to accelerate innovation in financial AI and enable rigorous, reproducible evaluation.