Emerging tech can improve regulatory processes, says BEIS report

The Department for Business, Energy and Industrial Strategy (BEIS) has published a research paper on the use of emerging technologies by regulators.

The paper, which sets out the benefits and challenges of using new technologies, said regulators are increasingly making use of such technologies, but they could benefit from learning from others.

“Regulators themselves could benefit from learning more from the experience of their peers, but to date there has been very little detailed information available on the work that regulators are doing in this area,” the paper said.

“However, emerging technologies have been increasingly considered and used by regulators. Harnessing these emerging technologies could help improve regulatory processes, for the benefit of regulators themselves, but also of those individuals, businesses and other organisations that interact with them.”

The paper said emerging technologies can help improve regulatory processes “in several ways”, including allowing for greater efficiency and cost-cutting through the use of machine learning or robotic process automation, and using artificial intelligence or machine learning to develop risk models, improving enforcement and monitoring.

However, the report also pointed out that the use of such technologies can bring challenges, including data quality, privacy and security concerns, which have “prevented the greater use of data analytics technologies at regulatory agencies”.

It added: “More generally, ethical concerns have been voiced about the use of algorithms to support or implement public policy, which several regulators might have viewed as additional risks to their reputation and legitimacy.

“Algorithms require a precise and clear decision-making logic, and this has been seen to clash with the ambiguity of many policies and the discretion and tacit knowledge that has often characterised regulatory work.”

The report said that using algorithms requires setting rules and firming up principles “that may not have been set so clearly in the past”.

It added: “In some cases, this will mean pushing civil servants toward defining those rules and setting an agenda in a way that goes beyond their remit and may go beyond the instruction provided by legislation.”

Regulators also need outcomes to be clear-cut, which can be difficult for some regulators that are operating in a way where several outcomes come together, the report said.

It also highlighted issues around costs and the time it takes to implement new technologies, and public sector organisations having enough resources to invest in the required development and testing.

“For those reasons, some organisations may choose to wait until the technologies they would consider using become somewhat more established,” it said. “As a result, they may be more affordable and tested, which means that later adopters can learn from the challenges that (more resourceful and/or less risk-averse) early adopters have faced.”

The report highlighted the importance of learning from others, considering starting small, or using “relatively easy first examples of implementation to build skills, confidence, and ensuring buy-in from internal and external stakeholders” and build on existing projects.

It also said that having cloud-based systems in place will mean access to greater computational capacity and access to specialised hardware without having to spend extra on it, and that developing centralised data management and storage systems is key, particularly for projects “that seek to leverage existing data”.

Many of the organisations BEIS spoke to in its research highlighted challenges around training or hiring staff, because of not being able to match private-sector salaries.

“Using external contractors also came with challenges for several of the organisations interviewed,” the report said. “In some cases, the public body identified external contractors through a competitive procurement process.”

It highlighted the fact that when there are finite time and resources available, “having a clear concept from the outset of what steps will be important to the development process”.

“This can help ensure that resources are allocated appropriately and that the project’s scope is suitable,” it said.

“Not all of the best practices presented in this report will be relevant to regulators looking to incorporate emerging technologies in all contexts. However, a general best-practice approach illustrating the key steps in the development process can be identified.”