Glossary

Human-in-the-loop control refers to a governance model where AI systems perform continuous validation and automation, while humans remain accountable for high-risk or ambiguous decisions. Rather than fully removing human involvement, this approach ensures that judgment is applied precisely where it creates the most value.

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In finance operations, most transactions are routine and can be validated automatically when data is aligned and consistent. Human-in-the-loop control allows these low-risk cases to flow through without friction, while surfacing only the exceptions that require interpretation, approval, or escalation. This model reduces operational load without sacrificing responsibility or oversight.

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What differentiates human-in-the-loop control from traditional approval chains is timing and intent. Human intervention is not systematic or preventive by default; it is triggered only when validation fails or uncertainty exceeds predefined thresholds. As a result, finance teams can focus their expertise on decisions that truly matter, rather than reviewing volumes of compliant transactions.

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This model is increasingly enabled by AI agents that continuously assess data quality and risk in real time. Within Phacet, human-in-the-loop control is embedded into the product platform, ensuring that automation scales without removing accountability from finance teams.