The Productivity Commission (PC) has released an information paper on the opportunities to improve regulation and administration through technology.
The paper describes regulatory technology (‘regtech’) as the use of technology to better achieve regulatory objectives.
“Used well, it can support the improved targeting of regulation and reduce the costs of administration and compliance,” the paper says.
“While regtech can improve regulatory outcomes and reduce costs, it is not a substitute for regulatory reform,” it says.
“Indeed, as regtech is intended to make the task of regulating easier, advances in technology heighten the onus on policy-makers to ensure the need for, and design of, regulation are soundly‑based.”
The paper says Australia was viewed as being comparatively well‑placed internationally for the widespread adoption of regtech.
“Yet, with the exception of financial system applications, extensive use of regtech remains relatively uncommon,” it says.
“There is potential scope in Australia to extend existing low‑tech solutions — including digitised data, forms, registers and transactions.”
These could reduce compliance costs for individuals and businesses, improve the efficiency of regulator practices, and generate flow‑on benefits for the community.
The paper says that leading‑edge regtech involved the use of data for predictive analytics and real-time monitoring, enabling better regulatory outcomes and potentially fewer compliance burdens for businesses.
However, it says, advanced regtech required specialised resources and long development times.
“Even in low‑tech applications, widespread implementation of regtech can take some years. It can require substantial investment by regulators and businesses in capacity and cultural change,” the paper says.
It listed four key areas where regtech solutions might be particularly beneficial: Where regulatory environments were particularly complex; Where there was scope to improve risk‑based regulatory approaches; Where technology could enable better monitoring; and Where technology could safely unlock more uses of data for regulatory compliance.
The PC’s 30-page paper can be accessed at this PS News link.
