What’s RegTech and why’s it relevant to me?
RegTech originated as a description of a body of technologies and technology practices focused on the area of financial compliance. One current definition for ‘RegTech’ refers to it as providing “…technically advanced solutions to the ever increasing demands of compliance within the financial sector.”
However, more recently, that somewhat limited definition has significantly expanded to embrace solutions for all manner of compliance-focused activities in many sectors. It’s particularly relevant for Local/State/Federal Government Agencies (and even 3rd party assessors) that have their own charter of regulatory compliance and are looking for their own “…technically advanced solutions to the ever increasing demands of compliance”.
Compliance is something that cuts across more agencies in more diverse ways than many people realise, ranging from Health and their responsibility for less-thought-of areas such as tobacco retailer compliance, to Revenue and their responsibility for land tax compliance. And, of course, through to the myriad agencies responsible for compliance in areas such as worksite safety, food production, liquor and gaming, dangerous goods stores, environmental protection and many more.
RegTech is increasingly relevant to the government sector because it provides focus on those technologies that enable agencies to address specific challenges around the digitization of their compliance activities, and also provides a platform for bigger picture long-term objectives for compliance technology solutions.
What sort of solutions and technologies are we talking about?
All the types of agencies listed above have very different compliance rules, as demanded by the diversity in the legislation they operate under.
So what is it that unites them? It’s the need that they all have to automate activities such as building and managing lists of upcoming jobs for their staff, the need to digitise compliance checklists and workflows to run and record their infield audits, and the need to integrate the data they’ve generated back into case management and (in some cases) infringement systems. And, of course, most importantly, the need to glean further insight, knowledge or detect actionable exceptions in the data - in as close to real time as possible to ensure maximum benefit and compliance.
In other words, despite the domain differences, the technologies and tools you need to build these solutions share the same characteristics, which are:
- Agility – data can be rapidly acquired from the necessary sources and organized quickly
- Speed – reports can be configured and generated quickly
- Integration – short timeframes to get a solution up and running
- Analytics – RegTech uses analytic tools to intelligently mine existing “big data” data sets and unlock their true potential e.g. using the same data for multiple purposes.
When you consider the range of checklist parameters across all agencies, plus the different workflows to escalate issues and manage infringements, it becomes abundantly clear that any government-focused ‘RegTech’ software needs to be highly configurable, enabling new solutions to be rapidly created.
What solution building blocks matter to Government RegTech?
So what are the characteristics that government-focused RegTech software should have? Below is a table that looks at a variety of the key needs and proposes the types of technologies that need to be easily integrated into solutions:
|Need ||Why ||Technology |
|Applications able to be built by departments as well as IT ||IT departments are struggling under current development loads and can’t keep up ||No-code & low-code application builders |
Easily configured off-the-shelf solutions
|Applications able to be deployed into secure infrastructure by non-programmers ||Ops staff (particularly cloud experts) and DevOps professionals are rare and expensive ||No-ops infrastructure and app hosting that non-developers can easily deploy to and not have to worry about maintaining |
|Ability to manage and allocate jobs to remote field workers ||Many government compliance activities revolve around infield inspections/audits ||Job handling, simple synchronization between remote devices and servers |
|Ability for field workers to work on jobs across any device (in field, at office, at home) ||Even with great on-site applications, workers often finish reports offsite ||Centralised draft queues |
|Field workers need the right information about what to inspect/audit for each job, automatically embedded in the forms ||Increases productivity, decreases errors ||Dynamically generated form elements and checklists |
In-form API lookups
Easily configured conditional logic and workflows
|Field workers need to be able to work completely offline ||Network coverage in regional areas and within buildings, (especially in storage areas) often compromised ||Full offline operation |
|Completed jobs need to be routed down the right approval, or further processing workflows ||Most processes require some level of approval or exception processing ||Easily configurable approval and data enrichment workflows |
|Easy integration into systems of record and data lakes ||RegTech value is all about timely data and ability to analyse/action ||Availability of a wide variety of integrations with 3rd party systems |
|On-site access to supporting or reference information ||Workers don’t have to carry additional information with them |
|Integration and caching of work guides, information pages, instruction manuals, etc. |
Put the horse before the cart
RegTech is all about risk and compliance, but it starts with timely and accurate data capture, which is why the focus in government compliance solutions has to start with agile systems that enable this. The above table is predominantly about the data capture phase since this is the biggest challenge for most agencies and departments right now. However, once the data is available then it provides agencies with the opportunity to go higher up the ‘RegTech pyramid’ to analysis, exception detection and, ultimately, predictive pattern recognition.
How can I find out more?
In Australia there’s a growing RegTech community and an Australian RegTech Association which is already widening its brief beyond just financial compliance to provide guidance around government compliance and more. Organisations, such as OneBlink, whose Low-code tools service the RegTech market are actively engaged too so that they can ensure that their products keep up with the needs of regulatory agencies.