HIRA: A Human-in-the-Loop Retrieval-Augmented Cascade for Document Classification in Regulated Industries

Document classification in regulated industries is constrained by data residency, limited cold-start labels, scarce review capacity, and costly model-governance procedures. We present HIRA, a training-free, on-premises retrieval-augmented cascade for document classification in regulated deployments that combines BM25 over OCR text, dense text embeddings, and image-level representations through validation-calibrated weighted reciprocal-rank fusion. Confident documents are classified directly by retrieval; uncertain or visually confusable documents are passed to a locally hosted LLM verifier, which receives the OCR text, retrieved exemplars, label descriptions, and confusion-specific terms. When the verifier remains uncertain, the document is sent to human review. Each correction is stored as a margin-weighted retrieval exemplar and updates a Dirichlet-smoothed confusion graph, letting the system improve without updating model weights. On a private 80-class trade-finance corpus, HIRA processes the full 30,233-document production stream while requesting human correction for only 1,945 documents (6.4%), improving Macro-F1 from 0.6218 to 0.8548. On the corrected Tobacco-3482 benchmark, HIRA reaches 0.9423 Macro-F1 with a locally hosted DeepSeek-R1-Distill-Qwen-32B verifier, 17.4 percentage points above the zero-shot LLM baseline, while invoking the verifier for only about 40% of documents and reducing LLM calls by approximately 60%. With 518 human corrections (24.8% of the pool), HIRA matches the fully labelled pool oracle, in which all 2,086 pool documents are indexed with their ground-truth labels. These results show that selective human feedback and retrieval-memory adaptation can be a practical alternative to repeated model retraining for long-tail document classification in regulated deployments.

Evaluating Structured Information Extraction with Open Models in a High Risk Public Sector Application

The extraction of structured information from unstructured documents represents a critical component of digital transformations in all sectors. While proprietary solutions dominate commercial applications, a rapidly growing ecosystem of open-source Optical Character Recognition (OCR) engines, Large Language Models (LLMs), and Vision-Language Models (VLMs) offers accessible alternatives. However, systematic evaluations on realistic, multi-step extraction pipelines remain scarce. Responsible usage of such extraction tools require comprehensive evaluations on realistic tasks, especially as these solutions will be key components of applications in the public sector that the EU AI act categorizes as high risk. To address this gap we present a comprehensive benchmark assessing the end-to-end performance of open-source systems on a complex real-world document processing task classified as high risk: Student applications for an international study program. We conduct a comprehensive empirical evaluation with state-of-the-art OCR engines, LLMs and VLMs. Our results reveal that while VLMs generally outperform OCR+LLM pipelines, even state-of-the-art open-source models struggle to handle such tasks reliably in zero-shot settings. Only 4 of 35 configurations achieved F1 scores above 0.5, with the best OCR+LLM pipeline matching top VLM performance, though most OCR+LLM combinations performed substantially worse. Roughly 75\% of all configurations scored below 0.25. Model scale influences performance, yet the relationship is non-linear: substantially larger models do not guarantee proportionally better results. Input quality, particularly the structural preservation of OCR output, emerges as a critical factor independent of downstream model capability.