Regulators are used to enforcing legislation to create efficient markets, uphold standards and protect consumers. But some are moving beyond this remit to play a more active role in the industries they’re part of.
The most progressive regulators are designing themselves to be a seamless part of the industry value chain. They’re looking to not only deliver high-quality regulation but actively seeking to also stimulate growth in the industries they regulate.
Leading regulators are achieving that around three key themes:
Fitting into the ecosystem of the firms they regulate. Leading regulators have in-depth understanding of the firms and processes operating in their markets, and use this insight to introduce new and simple processes that benefit all parties.
For example, the Civil Aviation Authority’s (CAA) new commercial pilot licensing system integrates training organisations (ATOs) into the end-to-end process of gaining a licence. Rather than the regulator processing complex licence applications only when the training is complete, ATOs now use the CAA’s systems to build a record of experience, examination and skills test passes during the training itself. It means candidates can find out exactly what’s left to do at any point with an ‘Am I Ready?’ online service.
Extending the regulation process to include ATOs has other advantages. It allows would-be pilots to avoid a trip to the CAA’s Gatwick office – they can present their passport to be verified at the training school. And it’s helping to reduce the time to issue a licence from weeks to days.
Helping regulators unlock their full potential
Applying the best principles of consumer experience. The last decade has seen a revolution in the way consumer-facing businesses use technology to make services as simple and frictionless as possible. We’re all customers in our own lives and when companies are easy to deal with, we expect that ease of use to flow through to our professional activities too.
The Security Industry Authority have taken this insight and changed the way they regulate the private security industry. They have created closer relationships with businesses, enabling individuals to be supported in obtaining and maintaining their licence by their employer and giving businesses greater control over their workforce.
Promoting innovation. Some regulators consider their role to be about more than compliance and safety. They’re now increasing the emphasis on making it easier for the organisations they regulate to innovate for the benefit of the wider economy. This approach is completely consistent with government aims to grow by investing in science, research and innovation.
Ofgem, for example, launched the world’s first energy regulatory sandbox this year to enable businesses to trial propositions benefiting consumers in light-touch ways that avoid normal regulatory obligations. And Ofgem is funding a competition which encourages energy network companies to find innovations that reduce costs for consumers while helping deliver a low carbon future.
Regulators that lead in these areas can have a substantial positive impact on organisations they regulate. This isn’t necessarily about wholesale change. Instead, you can make stepwise improvements, showing intent and building momentum. As industry players benefit, their participation will increase and the opportunities for change will become apparent. To get started, it probably means a change of mind-set: how can you help your industry to improve its performance?