RegTech and the public value it can create

Governments worldwide are increasingly seeking efficient and effective means to deliver public value, and digitalisation is emerging as a key part of this transformation – how often are we hearing ‘digital first’ as a policy?

RegTech is part of this transformation and aligned with thoughts around the public value can see governments and governmental bodies adopting this technology.? RegTech emerges as a catalyst for driving regulatory efficiency while addressing the concerns of regulatory agencies and the wider community.

While the potential benefits of RegTech are evident, challenges persist in its implementation within regulatory frameworks. Six key considerations must be addressed to ensure the successful adoption of RegTech:

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1.?????? Addressing and dispelling any misconceptions about the capabilities of RegTech and setting realistic expectations regarding its impact on regulatory practices.

2.?????? Regulatory agencies must be adequately prepared to embrace RegTech, including investing in training and infrastructure to support its implementation.

3.?????? Effective oversight by both technical and regulatory experts is essential to monitor the performance and compliance of RegTech solutions.

4.?????? Measures should be in place to prevent human biases from influencing technological processes, ensuring fairness and accuracy in regulatory enforcement.

5.?????? Thorough commissioning processes are necessary to identify suitable RegTech applications and integrate them seamlessly into existing regulatory frameworks.

6.?????? Robust risk management practices are vital to anticipate and address potential pitfalls associated with RegTech adoption, safeguarding against unintended consequences.

Despite these challenges, a viable path exists for integrating RegTech into regulatory practice to unlock its full potential in public value creation. Governments must remain focused on regulatory purpose and effective design while fostering collaboration with RegTech providers and regulated entities (just one purpose of a regulatory sandbox). By embracing foresight, planning, and reflection, regulatory agencies can navigate the complexities of RegTech implementation and harness its transformative power to optimise public value.

RegTech can ultimately serve the interests of governments and society at large with great transparency, oversight and feedback to improving policy.

(Mostly based on the paper ‘RegTech and creating public value: opportunities and challenges’ https://www.tandfonline.com/doi/epdf/10.1080/25741292.2023.2213059?needAccess=true)