AI hallucinations cost UK and EU enterprises billions annually, undermining decision-making and compliance. This guide explores how combining Retrieval-Augmented Generation (RAG) with robust human-in-the-loop oversight and governance frameworks can reduce hallucination rates by up to 80%, ensure regulatory transparency, and deliver measurable ROI. Learn practical strategies, industry benchmarks, and relevant FCA and EU AI Act requirements to implement trustworthy AI across financial services, healthcare, legal, and manufacturing environments.