GraphRAG: Leveraging Graph-Based Efficiency to Minimize Hallucinations in LLM-Driven RAG for Finance Data

Mariam Barry, Gaetan Caillaut, Pierre Halftermeyer, Raheel Qader, Mehdi Mouayad, Fabrice Le Deit, Dimitri Cariolaro, Joseph Gesnouin


Abstract
This study explores the integration of graph-based methods into Retrieval-Augmented Generation (RAG) systems to enhance efficiency, reduce hallucinations, and improve explainability, with a particular focus on financial and regulatory document retrieval. We propose two strategies—FactRAG and HybridRAG—which leverage knowledge graphs to improve RAG performance. Experiments conducted using Finance Bench, a benchmark for AI in finance, demonstrate that these approaches achieve a 6% reduction in hallucinations and an 80% decrease in token usage compared to conventional RAG methods. Furthermore, we evaluate HybridRAG by comparing the Digital Operational Resilience Act (DORA) from the European Union with the Federal Financial Institutions Examination Council (FFIEC) guidelines from the United States. The results reveal a significant improvement in computational efficiency, reducing contradiction detection complexity from O(n2) to O(k ⋅ n)—where n is the number of chunks—and a remarkable 734-fold decrease in token consumption. Graph-based retrieval methods can improve the efficiency and cost-effectiveness of large language model (LLM) applications, though their performance and token usage depend on the dataset, knowledge graph design, and retrieval task.
Anthology ID:
2025.genaik-1.6
Volume:
Proceedings of the Workshop on Generative AI and Knowledge Graphs (GenAIK)
Month:
January
Year:
2025
Address:
Abu Dhabi, UAE
Editors:
Genet Asefa Gesese, Harald Sack, Heiko Paulheim, Albert Merono-Penuela, Lihu Chen
Venues:
GenAIK | WS
SIG:
Publisher:
International Committee on Computational Linguistics
Note:
Pages:
54–65
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URL:
https://aclanthology.org/2025.genaik-1.6/
DOI:
Bibkey:
Cite (ACL):
Mariam Barry, Gaetan Caillaut, Pierre Halftermeyer, Raheel Qader, Mehdi Mouayad, Fabrice Le Deit, Dimitri Cariolaro, and Joseph Gesnouin. 2025. GraphRAG: Leveraging Graph-Based Efficiency to Minimize Hallucinations in LLM-Driven RAG for Finance Data. In Proceedings of the Workshop on Generative AI and Knowledge Graphs (GenAIK), pages 54–65, Abu Dhabi, UAE. International Committee on Computational Linguistics.
Cite (Informal):
GraphRAG: Leveraging Graph-Based Efficiency to Minimize Hallucinations in LLM-Driven RAG for Finance Data (Barry et al., GenAIK 2025)
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PDF:
https://aclanthology.org/2025.genaik-1.6.pdf