Human in the loop 101: what is it and why is it so important?

Written on
byNicola Wee

Financial services firms have been turning to Natural Language Processing (NLP) solutions to extract valuable insights from vast amounts of unstructured data. But even the most advanced algorithms can’t match the intuition and creativity of the human brain. That’s where “Human-in-the-loop” (HITL) comes in. You might be wondering, what HITL is and why it’s so crucial to NLP solution efficacy? We’ve got you covered:


Consider an NLP solution as a car driving on a long journey. The car has lots of advanced features like automatic navigation and cruise control, which can make the trip smoother and more efficient. However, without a human driver to make critical decisions and react to unexpected situations, the car may get lost, encounter obstacles or even crash. In the same way, NLP solutions need human input to guide and adjust the automated processes, ensure accuracy, and prevent errors or biases.  Because, as Dr Gina Helfrich clearly points out in her recent article, AI can get things wrong sometimes. Human-in-the-loop provides essential insights and expertise to make the journey successful, correcting any mistakes to enable efficient machine learning.


By integrating human expertise into the NLP process, financial services firms can improve the accuracy and relevance of their insights. Humans can interpret complex linguistic nuances that algorithms struggle with, identify context and entities in the text that machines might miss.


But it’s not just about improving the quality of the insights. Human-in-the-loop can also help NLP solutions adapt and learn from their mistakes. It’s like having a personal trainer who gives you regular feedback on your exercise routine. As you work together, you can identify areas for improvement, adjust your technique, and achieve better results over time.


From a resourcing perspective, HITL means that you can get the most out of your investment in NLP solutions. Instead of having a team of experts working on tedious tasks such as annotation, they can focus on higher-level tasks like building more accurate models and designing new features.


In a nutshell, by integrating human-in-the-loop, financial services firms can achieve more accurate and relevant insights, and improve the NLP solution’s performance over time. Thanks to this continuous improvement, the earlier you implement, the better your solution will be compared to a competitor’s. 


Other recent posts


Demonstrating Consumer Duty Compliance with Technology - Key Takeaways from Aveni’s recent webinar

In our latest Consumer Duty webinar series,”Demonstrating Consumer Duty Compliance with Technology,” Joseph Twigg, CEO of Aveni, sat down with John Liver, Strategic Adviser at Kore and NED at Barclays, and Alan Blanchard, Head...

Aveni SPW

Schroders Personal Wealth adopts AI-based Aveni Detect platform to transform compliance function

Aveni, has been selected by Schroders Personal Wealth (SPW) to transform its compliance function. Through the deployment of the Aveni Detect platform SPW will use the latest advances in Natural Language Processing (NLP) to...

Screenshot 2023-02-15 at 11.53.52

'Dear CEO' letter: The FCA highlights gaps in Consumer Duty Implementation plans

The FCA has sent its ‘Dear CEO’ letters to 8 sectors in the financial services industry, providing guidance on how to effectively implement and embed the Duty. The letter outlines four key components:   ...

Analyst working with computer in Business Analytics and Data Management System to make report with KPI and metrics connected to database. Corporate strategy for finance, operations, sales, marketing.

The top 5 things financial services CROs are prioritising

As the financial services industry continues to evolve, risk and compliance functions are facing unique challenges. At the forefront of this evolution, Chief Risk Officers (CROs) are working tirelessly to ensure that their organisations...

Auto QA

Auto QA - the key to compliance and risk reduction

We’re all aware that Quality Assurance is a critical aspect of managing risk in the financial services industry. Without it, firms would have no idea if they were adhering to regulatory requirements. However, with...

consumer duty resources

5 top RegTech trends Chief Risk Officers need to be on top of in 2023

As we progress into the new year, it’s important for Chief Risk Officers (CROs) to keep an eye on the latest RegTech trends. By adopting the right technologies, CROs can ensure that their organisation...


A quick history of Natural Language Processing 

Natural Language Processing (NLP) is a field of artificial intelligence that involves the use of algorithms, statistical models, and other techniques to analyse, understand, and generate human language. NLP has a wide range of...


Aveni’s 2022 Consumer Duty Resources

As the year comes to an end, it’s a good time to reflect on the events of the past 12 months, both the good and the not-so-good. For both the Financial Services industry and...

Female customer support operator with headset and smiling, with collegues at background.

Aveni Detect now available on Genesys AppFoundry to transform Consumer Duty compliance

Aveni Detect is now available on the Genesys AppFoundry ™, a marketplace of solutions offering a curated selection of applications and integrations that elevate customer and employee experiences.   Developed as a ‘Machine Line...