The past decade has brought spectacular results in automation, revolutionizing the sector by improving transaction processing speed, reducing operational costs, and ensuring 24/7 service availability. Now, with the dynamic development of AI, a new perspective is emerging—these systems are designed to support employees, provide tools for better understanding customer needs, and contribute to yet another industrial revolution across various industries and sectors.
However, how should AI’s capabilities be understood and presented? Discussions often focus on two perspectives—increasing employee efficiency (the American perspective) or the potential reduction of jobs (the European perspective). In reality, every innovation aims to enhance operational efficiency, improve customer experiences through faster service, and ultimately lower costs. The key question remains: should technology merely replace humans, or should it coexist with them, creating a model in which the benefits for both sides are maximized?
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The Concept of Human-in-the-Loop (HiTL)
One of the most effective approaches to integrating AI into daily banking operations is the Human-in-the-Loop (HiTL) concept. This concept originated in IT, where humans actively participate in AI and machine learning (ML) processes. A typical example of such collaboration is in customer service: AI chatbots may handle standard inquiries, but often struggle with detecting emotion or urgency. A human advisor, however, can instantly sense frustration or confusion, providing not only accurate responses but also emotional reassurance.
HiTL asserts that the best results are achieved through a synergistic combination of technology and invaluable human input. In practice, this means that AI-driven systems can perform routine, repetitive tasks, while human intervention remains irreplaceable in key moments. This allows banks not only to optimize operational efficiency but also to enhance service quality, which directly impacts customer trust and loyalty.
Automation vs. the Need for Human Advisors
Automation brings numerous benefits—faster transaction processing, 24/7 service availability, and significant cost reduction. However, in areas such as mortgage lending or investment advisory, customers expect contact with a human advisor who can interpret individual needs and nuanced situations. While AI is an excellent tool for analyzing vast amounts of data and handling repetitive tasks, it is the human presence that provides context, makes judgment calls, and incorporates ethical considerations into decision-making.
In banking, trust isn’t built by algorithms. It’s built by people—supported by algorithms.
Virtual Branches and Video Consultations
Solutions enabling remote banking interactions are becoming increasingly popular. Virtual bank branches and video consultations are excellent examples of where the HiTL model is highly effective. These solutions allow customers to access a full range of banking services from anywhere while still being able to speak with an advisor in real time. A notable example of a successful implementation is Citibank’s collaboration with LiveBank, which introduced virtual branches for the APAC and EMEA regions. As a result, employee efficiency increased by 20% thanks to the use of digital meetings. The solution also contributed to higher customer satisfaction and reduced time-to-resolution for complex inquiries. Such systems not only enhance customer convenience but also enable quicker responses to their needs and the development of stronger relationships.
Benefits of Implementing the HiTL Model
Implementing the Human-in-the-Loop model brings numerous benefits to both banks and their customers. The key advantages include:
Increased Customer Trust
Direct contact with an advisor during digital service interactions builds a sense of security. Customers know that their situation is being monitored by an experienced specialist, which enhances the credibility of the financial institution.
Personalized Services
Advisors, equipped with full context and knowledge of specific situations, can tailor offers to individual customer needs. This allows for the creation of more personalized and relevant solutions that meet specific expectations.
Faster Problem Resolution
In atypical cases where standard procedures may fail, human intervention enables the rapid identification of optimal solutions. This increases customer satisfaction and minimizes the risk of serious operational issues.
Improved Service Quality
Combining AI’s advantages with human expertise helps eliminate errors and deliver recommendations that are both accurate and aligned with ethical and regulatory standards.
Key Areas for HiTL Implementation
In the financial sector, HiTL plays a crucial role in the following areas:
- Creditworthiness Assessment – AI analyzes customer data, but final decisions can be made by an analyst who considers the broader context and non-standard situations, especially in investment and SME/Corporate banking segments.
- Fraud Detection – Transaction monitoring systems detect suspicious activities, but human verification is essential for final assessments.
- Regulatory Compliance – AI assists in risk analysis and regulatory compliance, but human approval is required for decisions that require legal interpretation.
- Customer Support – Chatbots handle simple inquiries, while more complex questions are escalated to advisors.
- Investment Portfolio Management – AI suggests investment strategies, but financial advisors refine them based on additional insights.
Challenges and the Future of HiTL in Banking
Despite its numerous benefits, implementing the HiTL model comes with challenges. Key considerations include:
Employee Training
Advisors must be equipped not only with banking knowledge but also with the ability to use advanced technological tools. Regular training is necessary to ensure the smooth operation of hybrid systems.
System Integration
To enable seamless cooperation between AI and humans, technological solutions must be developed that allow smooth transitions between automated processes and human intervention.
Data Security and Regulatory Compliance
With rising cybersecurity threats and stricter data protection regulations, implemented systems must meet the highest security standards.
Balancing Automation and Personalization
Excessive automation may deter customers who value personal interactions with advisors. Finding the right balance is crucial to leveraging technology without losing the human touch.
Conclusion
Banks and financial institutions should invest in technologies that enable seamless transitions between AI and human advisors while also developing employees’ skills in working with intelligent systems. Modern platforms, such as LiveBank, demonstrate that digitalization and service personalization can go hand in hand.
Algorithms can process vast amounts of data and automate repetitive processes, but humans provide context, interpret ambiguous cases, and introduce ethical considerations into business decisions.
Instead of completely replacing humans, AI should support employees, allowing them to make more accurate and ethical decisions. Banks that successfully implement the HiTL model will gain a competitive advantage—not only through increased operational efficiency but, more importantly, by building lasting and valuable customer relationships.
The future isn’t about replacing humans. It’s about empowering them. The question is—are you ready?
