Fine-Tuning and Explaining FinBERT for Sector-Specific Financial News: A Reproducible Workflow

The increasing use of complex “black-box” models for financial news sentiment analysis presents a challenge in high-stakes settings where transparency and trust are paramount. This study introduces and validates a finance-focused, fully reproducible, open-source workflow for building, explaining, and evaluating sector-specific sentiment models mapped to standard market taxonomies and investable proxies. We benchmark interpretable and transformer-based models on public datasets and a newly constructed, manually annotated gold-standard corpus of 1500 U.S. sector-tagged financial headlines. While a zero-shot FinBERT establishes a reasonable baseline (macro F1 = 0.555), fine-tuning on our gold data yields a robust macro F1 = 0.707, a substantial uplift. We extend explainability to the fine-tuned FinBERT with Integrated Gradients (IG) and LIME and perform a quantitative faithfulness audit via deletion curves and AOPC; LIME is most faithful (AOPC = 0.365). We also quantify the risks of weak supervision: accuracy drops (−21.0%) and explanations diverge (SHAP rank ρ = 0.11) relative to gold-label training. Crucially, econometric tests show the sentiment signal is reactive, not predictive, of next-day returns; yet it still supports profitable sector strategies (e.g., Technology long-short Sharpe 1.88). Novelty lies in a finance-aligned, sector-aware, trustworthiness blueprint that pairs fine-tuned FinBERT with audited explanations and uncertainty checks, all end-to-end reproducible and tied to investable sector ETFs.

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Publication Details

Journal
Electronics
Published
2025-11-27
DOI
https://doi.org/10.3390/electronics14234680
Primary Topic
Stock Market Forecasting Methods
Type
article
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article

Fine-Tuning and Explaining FinBERT for Sector-Specific Financial News: A Reproducible Workflow

Claudiu Brândaș, Marian Pompiliu Cristescu, Dumitru Alexandru Mara, Petrea Ioana
Electronics
Stock Market Forecasting Methods
article

Fine-Tuning and Explaining FinBERT for Sector-Specific Financial News: A Reproducible Workflow

Claudiu Brândaș, Marian Pompiliu Cristescu, Dumitru Alexandru Mara, Petrea Ioana
article en

Abstract

The increasing use of complex “black-box” models for financial news sentiment analysis presents a challenge in high-stakes settings where transparency and trust are paramount. This study introduces and validates a finance-focused, fully reproducible, open-source workflow for building, explaining, and evaluating sector-specific sentiment models mapped to standard market taxonomies and investable proxies. We benchmark interpretable and transformer-based models on public datasets and a newly constructed, manually annotated gold-standard corpus of 1500 U.S. sector-tagged financial headlines. While a zero-shot FinBERT establishes a reasonable baseline (macro F1 = 0.555), fine-tuning on our gold data yields a robust macro F1 = 0.707, a substantial uplift. We extend explainability to the fine-tuned FinBERT with Integrated Gradients (IG) and LIME and perform a quantitative faithfulness audit via deletion curves and AOPC; LIME is most faithful (AOPC = 0.365). We also quantify the risks of weak supervision: accuracy drops (−21.0%) and explanations diverge (SHAP rank ρ = 0.11) relative to gold-label training. Crucially, econometric tests show the sentiment signal is reactive, not predictive, of next-day returns; yet it still supports profitable sector strategies (e.g., Technology long-short Sharpe 1.88). Novelty lies in a finance-aligned, sector-aware, trustworthiness blueprint that pairs fine-tuned FinBERT with audited explanations and uncertainty checks, all end-to-end reproducible and tied to investable sector ETFs.

ElectronicsVol. 14(23)
Lucian Blaga University of Sibiu (RO), West University of Timişoara (RO)
Openalex Percentile: Top 58%
Stock Market Forecasting Methods
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