Human-in-the-Loop: Optimizing AI-Driven Processes

In the ever-evolving landscape of artificial intelligence (AI) and – more broadly – intelligent document processing (IDP), the term “human-in-the-loop” (HITL) has emerged as a pivotal concept. It’s redefining the way businesses operate and drive success.

In fact, according to McKinsey, “executives from companies that have seen success with automation are twice as likely as others to report using human-in-the-loop designs.” Let’s take a look at what human-in-the-loop really means, the benefits it offers, and top applications to understand why this is the case.

What Is Human-in-the-Loop?

At its core, human-in-the-loop refers to a collaborative framework where humans and machines work hand-in-hand to achieve tasks more effectively than either could alone. In the realm of artificial intelligence, this synergy becomes especially powerful. Instead of relying solely on automated processes, HITL incorporates human expertise to handle complex, nuanced, or ambiguous tasks that machines might find challenging.

With a human-in-the-loop approach, experts can oversee processes and play a crucial role in training machine learning (ML) models. They provide labeled data, correct errors, and validate results, contributing to the continuous improvement and refinement of AI systems.

Key Benefits of Human-in-the-Loop Processing

The combination of AI algorithms automating repetitive tasks and humans maintaining control over processes yields significant benefits, including:

Increase Efficiency

Machines excel in handling common scenarios, but they may struggle with situations that deviate from the norm. When humans can step in to address these unique challenges and “teach” machines how to properly overcome them, organizations get a more robust, adaptive system and more efficient processes.

Improve Accuracy & Quality

Humans contribute domain expertise and contextual understanding that machines may lack. This collaboration results in improved accuracy, especially in tasks that require contextual interpretation, complex problem-solving, and/or subjective judgment.

Ensure Ethical Decision-Making

A recent study found that only 29% of business leaders feel AI is being used ethically. When you incorporate human oversight, however, the ethical concerns start to dwindle. For this reason, it’s not shocking that 93% of business leaders think humans should play a role in AI decision-making.

When humans can monitor and intervene, organizations can prevent unintended consequences or biased outcomes and align technology with ethical standards.

Increase Customer Satisfaction

Human involvement ensures a personalized and empathetic touch in customer interactions. Whether in customer service, support, or engagement, the combination of human understanding and AI efficiency leads to improved customer satisfaction and loyalty.

Drive Employee Skill Development

According to McKinsey’s The State of AI in 2023 Survey, 40% of organizations that are leveraging AI systems expect over 20% of their workforces to be reskilled throughout the next three years. Human-in-the-loop approaches only inflate this number.

In a human-in-the-loop setup, employees have more opportunities to develop new skills by interacting with advanced technologies. This promotes continuous learning and upskilling, fostering a workforce that is not only more satisfied but also better equipped to navigate the evolving technological landscape.

Boost Cost Efficiency

With a human-in-the-loop system, advanced technologies handle repetitive, routine tasks and humans focus on higher-level decision-making and tasks that require emotional intelligence. This optimization of roles can lead to better resource allocation and, in turn, cost efficiencies.

Comply with Legal & Regulatory Standards

Many industries face strict regulatory requirements, and one of the top risks associated with artificial intelligence is just that. McKinsey found regulatory compliance remained the second most relevant AI risk from 2019 to 2022.

Having humans in the loop enables businesses to navigate compliance challenges effectively by ensuring AI systems adhere to legal and regulatory frameworks.

Ensure Business Continuity

Human-in-the-loop systems are adaptable to changing circumstances. Humans can quickly adjust to new information, unforeseen challenges, or shifts in business priorities. This ensures systems remain responsive and effective in dynamic environments, so organizations are ready for anything that comes their way.

Top Human-in-the-Loop Use Cases

In order to achieve the many benefits human-in-the-loop systems offer, you need to properly leverage them. Here are some popular use cases to consider:

Customer Service & Support

Integrate automated chatbots or virtual assistants for routine customer queries and employ human agents who can step in for more complex or emotionally sensitive issues. This will ensure personalized and empathetic support, so you can increase customer satisfaction.

Backing up this notion, one recent survey revealed that 61% of consumers believe human customer service agents are better at understanding their needs than AI is.

Financial Fraud Detection

According to the Association for Financial Professionals’ 2023 AFP Payments Fraud and Control Survey, 65% of organizations fell victim to payment fraud in 2022. The survey also revealed that almost half of these organizations weren’t able to recover any of the money they lost, making preventing and detecting financial fraud critical.

To do so, you can combine automated fraud detection algorithms with human experts to review and verify suspicious transactions, assess complex cases, and provide insights into evolving fraud patterns. When it comes to preventing and detecting payment fraud in particular, many organizations are turning to accounts payable (AP) automation partners who take this human-in-the-loop approach and have the experience required to effectively identify fraudulent activity.

Human Resource Processes

Gartner found that recruiting was the top priority in 2023 for nearly 50% of human resource (HR) leaders, but almost 40% didn’t have the resources required to effectively recruit new employees. This likely drove many HR departments to turn to artificial intelligence for assistance.

While AI can be very effective for tasks like capturing job applications, obtaining applicant information, and screening resumes, it isn’t an ethical choice when it comes to decision-making. In fact, 31% of HR leaders don’t think AI should be used to make hiring decisions.

That’s where human recruiters come in. They should be in charge of making final decisions to ensure hiring aligns with organizational goals, values, and ethical standards.

Invoice Processing

Business process automation and artificial intelligence can expedite the accounts payable process, but the technology isn’t intelligent enough to manage exceptions. Nevertheless, with Ardent Partners’ recent AP Pulse on the Mid-Market report stating that exceptions are a main source of high processing costs and elongated approval times, it’s critical for AP teams to streamline this task.

Many organizations are doing so by adopting AP automation solutions that loop humans in during exception handling. These humans can be in-house employees or, if you’re looking to free up more of your AP staff’s time, outsourced experts.

Select the Right Partner

As organizations navigate the digital landscape, human-in-the-loop stands out as a transformative strategy, combining the best of human and machine capabilities. The key to fully embracing this collaborative approach is to select the right intelligent document processing partner who has experience with human-in-the-loop systems.

At MetaSource, we have over 30 years of experience and believe the best solutions are those that combine advanced technologies and expert human assistance. For some businesses, in-house staff takes on the expert human assistance role. For others, business process outsourcing (BPO) services make more sense. We can help you determine which is a better fit for your organization and assist in developing a strategy.

Contact us today to learn more about human-in-the-loop processes and how they can benefit your unique organization or download our free intelligent document processing guide to gain more insight into the bigger picture.