In 2018, over 2,000 consumers and 500 business leaders told us what they thought of regulation in the UK. While 83 per cent of the public were positive about the current landscape, businesses said they expect to lose revenue if regulators don't evolve to keep pace with disruptive change in the next two to three years.
Re-thinking Regulators: from watchdogs of industry to champions of the public
To discover how regulators can respond to disruptive change, we invited Board Members, CEOs and Chairs from the UK’s regulators to join us in an open discussion on the situation. The talks highlighted three areas regulators need to focus on:
If regulators are to effectively respond to disruptive change, they must understand its full context. Mark Swan, Board Member and Executive Director of Safety and Airspace Regulation at the Civil Aviation Authority, outlined two ways regulators can better understand the impacts and risks of innovation.
First, they need to understand their sector as a complete system, particularly in terms of who manages risk. Only with this systemic view can regulators establish how innovation will impact both the sector and its regulation and ensure the most positive outcome for consumers.
Second, regulators must understand the complete innovation cycle. Disengaging at the idea or design phase means they can’t fully explore the impact of new products and services, which raises the risks to consumers.
Trust is a pre-requisite of regulation, and although transparency may not always build trust, it demonstrates to consumers that regulators are on their side in a changing world. Burying views and evidence under layers of a website doesn’t promote transparency or trust.
This was a view strongly voiced by Dame Glenys Stacey DBE, former Chief Regulator and Chief Executive at Ofqual and Chair of Independent Farm Inspection and Regulation Review. She also highlighted how regulators must demystify their sectors to make the benefits of regulation compelling and clear.
For example, designing a simple scoring system to show which businesses are meeting standards would guide consumers to make decisions, and even compare companies across different industries. While a simple mechanism for consumers to highlight concerns, regardless of which regulator needed to respond, would create a consistent experience of regulation. Such approaches are challenging to build, but they would develop and maintain trust.
All 35 industry experts who joined the discussion also agreed that there’s a vital need to better use data to inform thinking and strategies. As regulated organisations leverage their data to embrace automation, artificial intelligence and machine learning, regulators must keep pace by using similar technology for the benefit of consumers.
With limited resources, regulators must therefore question the strategic benefits of the work they do now, using data to explore what should evolve and how the skills and knowledge in their organisations will inevitably adapt.
There must be a step-change in the immediate future of UK regulation. All public sector and authority bodies that provide education and advice, manage casework or intervene in the market will feel the impact. But only by re-thinking regulators can we ensure the best outcomes for consumers, businesses and society.