Harnessing Data for Improved Regulatory Compliance

How to effectively use data to enhance compliance and foster a culture of data-driven decision-making.

In a recent panel discussion hosted by Objective, regulatory experts came together to share their experiences and insights on how they've effectively used data to enhance compliance and foster a culture of data-driven decision-making within their organisations. Tracy, Kerry, and Stephen, each representing different regulatory agencies, provided valuable perspectives on their unique approaches to leveraging data for better regulatory outcomes.

Tracy's Journey: A Phased Approach to Data Adoption

Tracy began by recounting her organisation's transformative journey at New Zealand Inland Revenue, where they implemented a phased approach to adopting data-driven practices. The primary catalyst for this approach was the monumental task of replacing their entire computerised tax transactional system.

This phased approach started with the Goods and Services Tax (GST) in 2017 and progressed incrementally, culminating with child support in 2021. Tracy emphasised that this gradual transition allowed them to manage smaller, more manageable data chunks. It also enabled them to experiment with various interventions without disrupting the entire customer base.

One significant advantage of this phased approach was that it permitted the use of a smaller customer group initially, as GST primarily pertained to a specific segment of taxpayers. This approach would have been significantly more challenging if they had started with income tax, a much larger and more complex system. Starting with GST allowed them to test different interventions and new tools without affecting the entire customer base. Additionally, Tracy highlighted that they gleaned valuable insights from the GST community, which informed subsequent rollouts.

Crucially, the phased approach also enabled both customers and staff to adapt to the new data being captured through the upgraded computer system. Tracy stressed the importance of maintaining a fine balance between obtaining more data and considering the compliance costs incurred by customers and tax agents.

She noted that while having access to extensive data is valuable, it is essential to ensure that any additional data requested serves a clear and practical purpose. Tracy emphasised that they needed to demonstrate the use of collected data rather than allowing it to accumulate redundantly within their systems.

Stephen's Insights: Closing the Loop with Frontline Staff

Stephen, representing Queensland Rail, shared his organisation's approach to engaging frontline staff in the effective use of data. He underscored their success in cultivating a positive reporting culture among employees who are at the forefront of dealing with security incidents on a daily basis.

The key to their success was closing the loop with frontline staff. Stephen highlighted their commitment to ensuring that every reported incident was thoroughly reviewed and acted upon. To achieve this, they organized regular meetings and events where they empowered frontline staff to share their experiences. Real-life examples were used to illustrate the significance of their roles in maintaining safety and security.

Stephen also emphasised the importance of sharing data with frontline staff in a way that made it relevant and comprehensible to them. By doing so, they were able to build trust and confidence among these critical employees.

Kerry's Strategy: Enhancing Regulatory Maturity

Kerry, representing the Education Standards Board in South Australia, shared her organisation's journey in improving data usage in an environment characterised by low regulatory maturity. She highlighted the importance of reaching out to peer regulators and co-regulators to understand how data was being effectively employed in similar contexts.

One of their key strategies was to gather insights from other regulatory bodies that operated under the same national scheme. This approach allowed them to gain valuable perspectives on data usage and identify best practices. Additionally, they collaborated with the National Regulator, the custodian of a national system, to extract and utilise data effectively.

By leveraging national data and customising it for their jurisdiction, they were able to inform their board and the minister to make informed policy decisions. Kerry’s organisation also adopted a proactive approach by publishing enforcement data, showcasing a shift in their regulatory posture.

Furthermore, they used data to create a regulatory strategy and priorities, which played a pivotal role in building curiosity and trust among stakeholders.

Data as a Tool for Education and Compliance

The panellists explored various ways in which data can be harnessed to enhance compliance. Tracy highlighted their use of data to identify areas where education and customer understanding needed improvement. In New Zealand, they offer guidance and resources to new GST registrants and conduct regular checks on tax codes to prevent discrepancies.

She emphasised that clear policies and procedures were essential to ensure data accuracy and consistency. Implementing standardised data entry processes can prevent errors and improve the quality of collected data.

Tracy also shared a real-life example of addressing compliance challenges in the real estate sector. They collaborated with the Real Estate Institute to educate real estate agents about legitimate expense claims and conducted data-driven audits to prevent fraudulent claims.

Building a Data-Driven Culture

The panel discussion provided valuable insights into how regulatory agencies can harness data to improve compliance and enforcement. Empowering frontline staff, setting clear policies and procedures, and using data for education and prevention were key takeaways.

Fostering a data-driven culture within regulatory organisations can lead to more effective enforcement and better outcomes for both regulators and regulated parties. The journey towards data maturity may vary, but the importance of data as a strategic tool in regulatory compliance cannot be overstated.

As regulatory bodies continue to adapt and innovate in the ever-evolving landscape of compliance and enforcement, data will undoubtedly remain a cornerstone of their efforts to ensure fairness and accountability in their respective industries.

If you'd like to watch the full webinar you can find it here.