How to use technology to develop intelligent regulation

Bulb about to shatter
  • Published Date: 13 September 2019

How can regulators use technology to tackle the problems caused by shrinking resources and growing expectations? The answer is to become ‘intelligent regulators’ using technology to gather more information, organise it better, share it with other regulators, and use it wisely to inform decision-making.

This years’ ANZSOG/National Regulators Community of Practice Regulators Forum – The Intelligent Regulator - on Friday 4 October will explore the growing use of new tools and techniques in regulation and their role in increasing effectiveness and encouraging collaboration to tackle some of regulation’s tougher challenges.

The forum’s sessions will showcase a broad range of issues and sectors, from money laundering to data mining and drones, from fishing to family day care, and from illegal waste to water theft. The nature of many of today’s most critical regulatory challenges is that they cannot be solved by a single regulator operating alone, or by traditional intelligence-gathering techniques, and sessions will explore how regulators are using collaboration.

Headline speaker Bill Eggers, from the Deloitte Centre for Government Insights, outlines the opportunities offered by new technologies and business models, and the tactics for tomorrow’s regulators in his report The Regulator’s New Toolkit.

The report states that regulators around the world face the same basic problem: they simply don’t have enough resources. Complex internal processes add to their workload, while external pressures create a sense of urgency to complete work immediately.

If regulators are to serve the community better they need to use a range of new tools and techniques to overcome the perennial problem of too few resources chasing too many challenges, not to mention paradigm-busting new issues involving global actors and supply chains, the increasing penetration of organised crime and new technologies and media.

They can include:

  • AI-based technology: capable of analysing public comments, answering common questions
  • Robotic Process Automation: able to handle predictable, repetitive processes – can reduce compliance costs without compromising consumer protection
  • Big Data Analytics: can help spot patterns and identify potential risks
  • Internet of Things: allows for better monitoring by collecting and sharing data
  • Augmented Reality: allows regulators to do physical inspection remotely
  • Blockchain: adds to transparency
  • Drones: extra pair of eyes, more suitable for dangerous locations, aerial inspections.

Mr Eggers says that adopting the new regulatory toolkit can increase internal efficiency, improve effectiveness and reduce the compliance burden for constituents.

Some agencies are already using these technologies to work smarter. The New York Fire Department has used data to analyse which buildings are most likely to be at risk of fires, and has successfully targeted inspection to the point where New York has gone an entire year without a fire-related death.

The UK’s Behavioural Insights Team is working with regulators to identify underperforming schools and GP offices, by checking publicly available data to spot problems and develop an algorithm to predict which clinics are at the highest risk.

The Deloitte report concludes that fully realising the potential of technology for improving regulation requires “sustained investment of financial resources and political capital to develop these capabilities, reengineer processes and encourage innovation”.

Examining regulatory collaboration

The Australian Communications and Media Authority (ACMA) faced this issue when it was tasked with combatting illegal offshore gambling in 2017. They engaged with overseas regulators, payment processors, software providers, trade groups and the domestic gambling industry.

The Commonwealth Government’s Black Economy Taskforce developed a multi-pronged response to disrupt tax avoiders, fraudsters, and others who seek to profit from ignoring the requirements faced by legal businesses. These operators work in the shadows and constantly change their business models to avoid regulatory frameworks. The work of the taskforce highlighted how addressing the black economy requires coordinated efforts by a multitude of Commonwealth, State and Territory regulators, alongside the business community and government purchasers.

All these developments show how important it is for regulators to update their toolkit, particularly around how they collect, share and apply data and intelligence, and how they find new ways to work with fellow regulators and others in this brave new world.

About the Forum

The Regulators Forum is the sixth annual event offered by the National Regulators Community of Practice. It draws practising regulators from across Australia and New Zealand, building networks and bridges between different sectors and supporting regulators to learn with and from their peers to help deal with shared challenges.

Speakers and facilitators include:

  • Jennie Granger, Professor of Practice at UNSW Business School (international expert in tax compliance)
  • Arie Freiberg, Emeritus Professor (ANZSOG and Monash University)
  • Cheryl Batagol (Chair Vic EPA)
  • Kaia Hodge (NSW Natural Resources Assessment Regulator)
  • Matthew McCrone (Vic Real Time Prescription Monitoring) and
  • Dr Nathan Newman (AUSTRAC).

The Forum will consist of four sessions examining different regulatory issues including tax and crime; illegal waste dumping and water theft; and Commonwealth/State cooperation in regulating family day care.

It will help regulators appreciate the importance of data culture and value the information they and their peer regulators hold. It will help them identify which tools and techniques are best suited to supporting their work, and how they can be used to escape from the trap of inadequate resourcing chasing growing demands.