The regulatory industry – or should that be industries?
At first glance the regulatory industry appears to consist of unrelated elements
Each operating with its own mandate, and often, a large degree of autonomy
These elements include various levels of government, industry bodies and corporate entities. A closer look reveals these diverse enterprises are broadly united in serving a common objective. The goal of most regulation is ultimately to uphold the public interest; ensuring commerce and industry are run equitably and ethically, on behalf of all stakeholders.
Society places considerable value on this ideal. In 2015 over 277,000 people were employed by regulatory industries in the U.S.—that’s more than the global workforce of General Motors.
However, the onset of industry 4.0 and the rapid emergence of new industries, has irrevocably altered the regulatory landscape. These changes are making old points of reference unreliable and rendering many legacy regulatory platforms redundant.
This structural shift creates immense challenges for regulators, whether looking to comply with legal requirements, an industry mandate, or corporate governance. Frequent amendments, changing disclosure requirements, and increasingly detailed oversight, are just a few factors regulators must continually adapt to.
These effects may be compounded; as regulatory requirements and regulatory change, are often thrust into the spotlight as part of more complex economic scenarios, playing out with a heightened sense of urgency.
Regulators need to demonstrate their ongoing compliance to stakeholders and increasingly the media, at any time. They must not only operate effectively and transparently, they need to be seen operating transparently, especially when reputation management is involved.
Meeting the challenge
The need for a strong regulatory environment has never been greater, making a clear and coherent regulatory framework operationally essential.
The right technology partner is critical in achieving this. Replacing paper-based processes, part solutions and outdated technology with increased automation and accuracy, not only streamlines the regulatory process. It also prevents any dysfunctionality arising from behavioral economics or inherent cognitive bias.
The best digital solutions eliminate ambiguity while instilling ownership and oversite. While artificial intelligence and machine learning can even identify competitive advantages resulting from regulatory change.
One thing is indisputable. A well-regulated industry or organization will always have an edge over a poorly regulated entity.