RegTech and creating public value: opportunities and challenges

Abstract

Abstract Regulatory technology (RegTech) has its origins in private sector applications of information technology in pursuit of more efficient compliance with government regulations. Initially, the term “RegTech” referred to either the technical solutions intended to aid financial service providers in managing regulatory issues or to the companies and organizations that develop and deliver such solutions. Increasingly, regulatory experts are stretching the term’s coverage to include efforts by governments to harness technical solutions in pursuit of more efficient targeting and conduct of regulatory monitoring and enforcement. Whether deployed within the private or public sectors, RegTech holds significant potential to improve regulatory compliance, reduce compliance costs, and improve the speed and accuracy with which known harms can be addressed and emerging risks can be identified. Here, we focus on the potential for RegTech to support the creation of public value. We suggest public value is most likely to be realized when governments (1) keep focused on regulatory purpose and effective design and (2) build effective collaboration with RegTech providers and regulated entities. KEY MESSAGES: Governments hunger for more efficient and effective ways to deliver public value. Increasingly digital/digitisation is being seen as the way to deliver this. With regard to the regulation of harms, RegTech is the latest in a line of proposed approaches. RegTech holds promise but we know it is not failsafe because it can exhibit both data science and human implementation problems. Implementation of RegTech brings both practical opportunities and challenges.