Artificial Intelligence in the Public Sector: Frequently Asked Questions

January 26, 2026 • 10 min read • WiseMonks

The public sector is increasingly looking to artificial intelligence as a tool to help deliver services to citizens more efficiently, reduce bureaucracy, and ensure transparency. However, this sector also faces unique challenges—from data protection to public trust. We answer the most common questions about AI applications in the public sector.

1. How does AI help automate document processing in the public sector?

AI systems can automatically classify incoming correspondence, extract data from applications, forms, and declarations, and transfer them to information systems. Natural language processing technologies understand document content and can automatically route them to the responsible specialist. This reduces document processing time from days to minutes and frees employees for more complex tasks.

2. How can AI improve citizen services?

AI chatbots and virtual assistants can answer the most common citizen questions 24/7—about service delivery procedures, required documents, deadlines, and status. Systems can operate in multiple languages and be accessible through different channels—website, email, phone. This is especially useful for municipalities where the same question is asked dozens of times per day.

3. How do AI solutions comply with GDPR requirements?

AI solutions in the public sector must comply with GDPR requirements—data minimization, purpose limitation principle, and individuals' right to know how their data is used. Technical measures include data anonymization, encryption, and access control. Before implementing an AI solution, a Data Protection Impact Assessment (DPIA) is mandatory, especially when processing sensitive personal data.

4. How to ensure transparency of AI solutions in the public sector?

Transparency is one of the most important conditions for AI application in the public sector. It's recommended to use explainable AI methods that allow understanding and explaining why the system made a particular decision. The EU AI Act establishes specific transparency requirements for high-risk AI systems, which are often used in the public sector.

5. How does AI help detect fraud in public procurement?

AI analyzes public procurement data—bid price patterns, participant relationships, contract history—and identifies unusual patterns that may indicate collusion, conflicts of interest, or other violation risks. The system can automatically flag suspicious procurements for additional human review. This helps use limited audit resources more efficiently and increases public procurement transparency.

6. What is a smart city and how does AI contribute to its creation?

A smart city uses technologies and data to optimize urban infrastructure and services for residents. AI plays an important role in several areas: traffic flow management (signal optimization, congestion prediction), energy grid balancing, waste collection route optimization, and public safety through video analytics. In Lithuania, smart city elements are already being implemented in Vilnius, Kaunas, and other cities.

7. Can AI help in the healthcare sector?

Yes, AI is already used in medical image analysis (radiology, pathology), patient flow management, drug interaction checking, and epidemiological trend monitoring. It's important to emphasize that AI in healthcare acts as an assistive tool for doctors, not as their replacement—the final decision is always made by a medical professional. The EU AI Act classifies medical AI solutions as high-risk with strict requirements.

8. What are the biggest barriers to AI implementation in the public sector?

Main barriers include legacy IT systems that are difficult to integrate with new technologies, limited budgets, specialist shortages, and organizational culture that is often more cautious about innovations than the private sector. Public trust is also important—citizens must understand and accept that their data is being processed by algorithms. Gradual implementation and active communication help overcome these barriers.

9. How will the EU AI Act impact the public sector?

The EU AI Act establishes specific requirements for AI systems based on their risk level. Many public sector AI applications—social benefit distribution, law enforcement systems, migration management—are classified as high-risk. This means mandatory conformity assessments, human oversight, documentation, and registration in the EU AI systems database. Institutions should already start preparing for these requirements.

10. Where to start AI implementation in a public institution?

We recommend starting with a specific, clearly defined problem—for example, document classification or automatic answering of frequently asked questions. It's important to involve employees from the beginning, ensure management support, and have clear success metrics. A pilot project allows demonstrating AI value with lower risk and gaining practical experience before expanding application.

Want to learn more?

Back to blog