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Tackling AI Challenges in Public Services with Solutions Designed for the Complexity

Chad Davis Thumbnail
Chad Davis
Published March 21, 2025

The integration of artificial intelligence (AI) is poised to revolutionize government operations, driving increased productivity, improved citizen services, and greater efficiency across the public sector. According to recent research by Accenture, 42% of all working hours in public services globally are within scope for augmentation or automation through generative AI, highlighting its transformative potential. 

Additionally, McKinsey estimates that generative AI could boost productivity across the public sector and adjacent industries by up to $480 billion annually. However, challenges remain: Deloitte reports that 80% of government organizations are still in the early stages of digital maturity, underlining the need for thoughtful implementation to fully realize the benefits of AI.

In this article, we’ll explore some of the most impactful AI use cases for public sector institutions, the role of advanced AI technologies like retrieval-augmented generation (RAG), and the critical solutions needed to manage accompanying challenges.

Top public sector use cases for AI

AI promises myriad benefits for public sector organizations. Among them include:

  • Better citizen experiences: AI technologies have the potential to transform how governments engage with their populations by providing faster, more personalized responses to inquiries. In Singapore, for instance, the Virtual Intelligent Chat Assistant (VICA) demonstrates how conversational AI platforms can help government agencies respond to citizen queries more effectively. Similarly, AI translation services, like those deployed in New Jersey to improve access for unemployment insurance applicants, highlight the vast potential to bridge language gaps. These technologies can ensure streamlined and equitable access to critical governmental services, cutting down on wait times and breaking down systemic barriers like language.
  • Fraud detection and risk mitigation: Fraud remains a significant challenge across public service domains, from welfare programs to tax filing systems. The potential for AI to proactively enhance fraud detection is immense. Through the use of real-time monitoring, behavioral analytics, and anomaly detection, AI can reduce errors and flag suspicious transactions more effectively than traditional methods. By adapting faster than evolving criminal tactics, AI systems can play a vital role in safeguarding public funds and ensuring program integrity, especially in high-volume areas like financial assistance and social benefits programs.
  • Operational and efficiency improvements: AI is already showing how it can improve the efficiency of government processes in many ways. For example, U.S. federal agencies are leveraging large language models such as ChatGPT Gov to create internal tools such as search engines and chat systems that streamline workflows and empower employees with quicker access to information. Additionally, in Memphis, city trucks equipped with AI video technology are being piloted to monitor infrastructure conditions and prioritize repair needs. Meanwhile, tools like the National Institute of Standard and Technology’s Dioptra allow U.S. agencies to test the trustworthiness of AI models, ensuring they meet rigorous standards. These examples illustrate how AI can automate routine processes, improve infrastructure management, and ensure that public funds are spent more efficiently.
  • Data-driven decision-making and critical planning: AI also holds significant promise for enabling public sector leaders to make smarter operational and strategic decisions. In public healthcare institutions, for example, there is potential for AI to assist in analyzing patient records, accelerating drug trials, and enabling personalized care through genomic research. Additionally, urban planners could use AI to assess population trends, identify infrastructure bottlenecks, and allocate resources dynamically as needs shift. These applications, while not yet fully realized in many areas, highlight the ways AI could enhance planning and decision-making across a range of critical government functions.

The role of critical AI technologies like RAG in public sector services

As public sector institutions expand their adoption of AI to improve citizen experiences, mitigate fraud, streamline operations, and enable smarter decision-making, advanced technologies like retrieval-augmented generation (RAG) are becoming indispensable.

RAG combines the power of information retrieval and natural language generation to deliver results that are both precise and contextually relevant. For instance, citizen-facing virtual assistants integrated with RAG can draw on real-time data from government databases to provide personalized and accurate responses. Instead of delivering generic search results, these systems can assist citizens with queries ranging from welfare benefits to voter registration details in a meaningful, contextual way.

Moreover, RAG has significant applications beyond direct citizen interactions. It can assist with compliance by automating document retrieval and audit preparation, ensuring public institutions are better equipped to meet regulatory requirements. By consolidating data from disparate systems into cohesive and actionable outputs, RAG opens new possibilities for improving both efficiency and accountability in government operations.

Addressing RAG challenges with the right solutions for AI

While technologies like RAG hold immense promise, their deployment in the public sector comes with challenges, including data security concerns, performance bottlenecks, and regulatory hurdles. The right technological solutions can mitigate these risks and make AI adoption seamless. Here are some examples:

Performance and traffic management:

Solution: Load balancing. AI systems in government need to handle immense traffic, particularly during crises or peak periods like tax deadlines. Implementing load-balancing technology ensures seamless performance by distributing high-demand workloads across systems and reducing latency during key operations.

Restricted data exposure:

Solution: Application security. Governments manage vast repositories of sensitive citizen data, from healthcare records to financial information. Advanced security solutions, such as API security tools or AI gateways, are critical for ensuring the confidentiality and integrity of this data while enabling secure AI operations.

Compliance and regulatory challenges:

Solution: Logging and reporting. Advanced logging tools enriched with AI capabilities can create clear audit trails by capturing details of AI activity, including data access and output generation. These capabilities streamline compliance processes and demonstrate accountability during regulatory audits.

Paving the way for responsible AI in government

AI has the potential to transform the public sector, improving productivity, operational efficiency, and citizen services. From revolutionizing service delivery with conversational AI tools to employing advanced analytics for planning infrastructure projects, government agencies stand to benefit immensely from the thoughtful application of AI. However, realizing this potential requires addressing key challenges, including the need for scalable infrastructure, enhanced data security, and compliance with stringent regulations.

By embracing advanced technologies like RAG and partnering with reliable solution providers, public institutions can accelerate their AI adoption while ensuring ethical and secure implementation. As AI continues to evolve, its transformative impact in governance will drive meaningful outcomes for citizens and society.

Learn more about why modern AI apps require the most modern solutions here. Also, register for F5’s AppWorld Public Sector Symposium in Washington, D.C. from April 8-10.