The Productivity Commission has released an information paper on Regulatory Technology which is intended to support the consideration of opportunities to improve regulatory administration and compliance through technology.

Regulatory technology (‘regtech’) is 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 highlights factors that policymakers and regulators should consider in adopting regtech, and in enabling greater use of regtech. The paper also raises the question of whether there is a gap — is regtech adoption less than some optimal level given the opportunities — and, if so, what is causing it.

The Paper observes that

• While regtech can improve regulatory outcomes and reduce costs, it is not a substitute for regulatory reform.
• with the exception of financial system applications, extensive use of regtech remains relatively uncommon.
• 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.
• Leading‑edge regtech involves the use of data for predictive analytics and real-time monitoring, enabling better regulatory outcomes and potentially fewer compliance burdens for businesses. But advanced regtech requires specialised resources and long development times.

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Author: David Jacobson
Principal, Bright Corporate Law
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The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.