Why do regulatory agencies exist

This likely means adhering to set standards or widely used data formats. In a number of cases, due either to industry or circumstance, companies and individuals may have to deal with multiple regulatory agencies. For example, they may need Occupational Safety and Health Administration for workplace-related matters, the Department of Labor for human capital-related matters, and local or state regulators focused on their industry. In complicated markets like finance, these different regulatory agencies may be requesting similar, or even the same, data sets to carry out their duties.

This duplication burdens both the regulated entity and the regulator. The regulated entity has to respond to multiple requests for similar sets of data, and regulators generally have to use limited resources and wait to receive the data, even though a peer agency may already have a data set they could use.

One potential solution is to find ways for industry and regulators to collaborate, both to rationalize the requests being made and to better share data between regulators. For example, a given agency may only visit or investigate a fraction of the companies it is responsible for, and those it is unable to cover may be accessed by other regulators who could bring back useful data.

Losing a loved one is a difficult time for a family, exacerbated by bureaucratic processes to register the death. Families are responsible for informing multiple agencies in order to officially register the death. Department for Work and Pensions Driver and Vehicle Licensing Agency This service allows multiple organizations to receive necessary data while working to eliminate the burden on the citizen during a particularly vulnerable time.

As regulators embark on an era of increased collaboration, they should consider the following:. Potential partners. What other agencies are engaged in this space? Identifying the right partners and setting up the necessary agreements can help facilitate data sharing and collaboration. As the supply chains for new medicines go global, so too must regulators who aim to keep the patient safe.

A new organization, the International Coalition of Medicines Regulatory Authorities ICMRA , is being launched to help increase collaboration and coordination among global medicinal regulatory agencies.

Data usage. Not all data can be shared. Limiting data access to those authorized helps build trust between regulators and regulated entities. Every day new regulations are proposed, draft regulations commented on, and final rules published in the Federal Register. These rules add to the existing set of regulations and expand the oversight and enforcement scope of regulators. From the perspective of the regulated entity, these new rules may represent an investment—of time, effort, and money—to understand whether the new rules apply and, if they do apply, are they impacted by any additional regulations as a result.

Executive Order Improving Regulation and Regulatory Review contains one solution to this problem. The advent of new technologies like machine learning and artificial intelligence may make this task easier, enabling more frequent regulatory reviews.

In the process of reviewing their existing regulations, UK regulators identified opportunities to streamline their oversight and enforcement activities, reducing the burden on both the agencies and those they regulate.

The agency continued to evolve its approach to achieving impactful yet minimally burdensome regulation. In , the Better Regulation Executive implemented a one-in, two-out rule for regulation.

This approach drives prioritization of regulation by agencies and, at least anecdotally, increased consideration of alternatives to regulation. Quantify the burden.

Quantifying the burden of regulations along with the oversight and enforcement costs are some key first steps. Other nations have used similar studies as a starting point for discussions about opportunities to improve the general regulatory system. What happens to ineffective rules?

Ineffective or duplicative regulations could be modified, in the hopes of making them more impactful, or removed entirely. In the United Kingdom, the Red Tape Challenge program crowdsourced feedback on different sets of regulations.

Not only were citizens asked to provide feedback on whether they thought a regulation was working or not, they were also given free rein to suggest simplifications or modifications to specific regulations.

Regulations can play an essential role in protecting citizens and businesses, but if not done strategically, they risk being costly and burdensome for both agencies and businesses. Regulators are facing significant challenges—keeping up with technical and business model innovations, growth in the number of suppliers of goods and services, increasingly digital constituents, and the changing attitudes and behaviors of industries and consumers.

By aligning technology, strategies and processes, and talent, regulators have the opportunity to become the regulator of tomorrow. Through our services, we can help agencies:. Strategically select and migrate to a shared service model. Enhance the way financial regulators supervise and examine the regulated community. Adopt the latest technological solutions to help mitigate risks and protect against cyber threats.

Modernize core international development and diplomacy programs. Improve service delivery to help drive enhanced competitiveness and customer satisfaction and retention. Written by: Shrupti Shah. Cover image by: Traci Daberko. We are grateful to the many individuals who generously shared their time and insights to make this paper possible. Shrupti is a public policy and performance management specialist with more than 25 years of experience in the public and private sectors.

At Deloitte, she is the leader of the Behavioral Insights practice, which helps government agencies design, develop, and test behavior change interventions. She has advised governments on developing outcome-oriented strategies and the monitoring and managing performance in nine countries.

Shrupti holds degrees from the University of Oxford and London School of Economics and completed her executive education at the Harvard Kennedy School. See something interesting? Simply select text and choose how to share it:. The regulator of tomorrow has been saved.

The regulator of tomorrow has been removed. An Article Titled The regulator of tomorrow already exists in Saved items. Social login not available on Microsoft Edge browser at this time. Viewing offline content Limited functionality available. Welcome back. Still not a member? Join My Deloitte. The regulator of tomorrow by Shrupti Shah. Article 11 June Shrupti Shah United States. Navigating change Regulations exist to protect citizens and businesses, correct market failures, and make many aspects of our lives easier.

It's tough to be a regulator today Regulators are on the front lines of nearly every controversy resulting from a new technology—either being told to get out of the way or being called upon for solutions when incidents arise.

We see five general trends that are driving this tug-of-war between protection and innovation: The exponential pace of technological change. Part one: Rulemaking Regulators are often the agencies responsible for implementing policy mandates. Rethinking outreach: Consumer Financial Protection Bureau The Consumer Financial Protection Bureau CFPB , an independent agency of the United States government responsible for consumer protection in the financial sector, was seeking to enhance its citizen outreach efforts.

What to consider Connect early and often. Clarke 22 Innovative technologies and new business models can catch regulators off guard, especially when those technologies and business models scale quickly.

Sensing disruption: IARPA FUSE Making sense of the ever-changing technology landscape is daunting, but technology itself may provide some potential answers in the form of useful new tools. What to consider Consider alternative hiring channels. Opportunity: Consultation 2.

Consultation 2. Opportunity: Collaborative regulation Innovations that cut across regulatory areas of responsibility are yet another challenge facing regulators. What to consider Identify your allies. This section will explore several oversight and enforcement opportunities for the regulator of tomorrow: Correlate to predict Citizen as regulator Open data Collaborative regulating Retrospective review Opportunity: Correlate to predict Regulatory inspection is a time-consuming and costly process, and it is prohibitively expensive to monitor everyone.

Opportunity: Citizen as regulator In an era of budgetary constraints and limited resources, regulators may find it difficult to collect all the data they need. Crowdsourcing data from citizens can occur in two different ways: Active data gathering: Sources that require a user to engage with a regulator on a one-time or continuous basis, such as setting up a sensor network or downloading an app Passive data gathering: Sources that do not require a citizen to interact directly with the regulator; these may include review and ratings sites and social media For either approach, consider ways to gain access to the data.

Open data: Kennedy v. City of Zanesville For over 50 years, residents of a predominantly African-American part of Zanesville, Ohio, were denied access to clean water from the city water line, having to instead use rainwater or drive into town for water. What to consider What data can we share? It must identify and use the best, most innovative, and least burdensome tools for achieving regulatory ends. Acknowledgements We are grateful to the many individuals who generously shared their time and insights to make this paper possible.

Doyne Farmer, Quan M. Bul, and Jessica E. View in article Ibid. View in article Victoria Transport Policy Institute, Autonomous vehicle implementation predictions: Implications for transport planning , , p. View in article George F. Bishop, Alfred J. Tuchfarber, and Robert W. View in article Regulations. View in article Dr. View in article Similar to a US local or municipal government. View in article Gov.

View in article John Skerritt et al. View in article Skerritt et al. View in article Show more Show less. Topics in this article Regulatory , Compliance. Deloitte Consulting Learn more. Download Subscribe. Related Interactive 3 days ago.

Shrupti Shah Managing Director l Deloitte Consulting LLP Shrupti is a public policy and performance management specialist with more than 25 years of experience in the public and private sectors. Share article highlights See something interesting? Simply select text and choose how to share it: Email a customized link that shows your highlighted text. Copy a customized link that shows your highlighted text.

The Board also supervises and regulates the banking system to provide overall stability to the financial system. One of the key regulatory roles of the FRB is to oversee the commercial banking sector in the United States.

The Federal Reserve supervises and regulates many large banking institutions because it is the federal regulator for bank holding companies BHCs. This supervision enables banks to compete and provide efficient banking and financial services. Its mission statement verifies it is to "ensure that national banks and federal savings associations operate in a safe and sound manner, provide fair access to financial services, treat customers fairly, and comply with applicable laws and regulations.

Coverage extends to individual retirement accounts IRAs , but only the parts that fit the type of accounts listed previously. Joint accounts, revocable and irrevocable trust accounts, and employee benefit plans are covered, as are corporate, partnership, and unincorporated association accounts. FDIC insurance does not cover products such as mutual funds, annuities, life insurance policies, stocks, or bonds. The contents of safe-deposit boxes are also not included in FDIC coverage. Cashier's checks and money orders issued by the failed bank remain fully covered by the FDIC.

The OTS was similar to the OCC except that it regulated federal savings associations, also known as thrifts or savings and loans. The Commodity Futures Trading Commission CFTC was created in as an independent authority to regulate commodity futures and options and other related derivatives markets and to provide for competitive and efficient market trading. FINRA oversees all firms that are in the securities business with the public.

It is also responsible for training financial services professionals, licensing and testing agents, and overseeing the mediation and arbitration processes for disputes between customers and brokers.

State bank regulators operate similarly to the OCC, but at the state level for state-chartered banks. State regulators monitor, review and oversee how the insurance industry conducts business in their states. Their duties include protecting consumers, conducting criminal investigations and enforcing legal actions. They also provide licensing and authority certificates, which require applicants to submit details of their operations.

For a directory of specific state agencies visit www. In New York, the DFS regulates both financial firms and insurers, while in other states separate regulators monitor each industry separately. They provide registrations for investment advisors who are not required to register with the SEC and enforce legal actions with those advisors.

The SEC acts independently of the U. Its regulatory coverage includes the U. It also regulates investment advisors who are not covered by the state regulatory agencies. The SEC consists of six divisions and 24 offices. The six divisions and their respective roles are:. The SEC is allowed to bring only civil actions, either in federal court or before an administrative judge. Criminal cases fall under the jurisdiction of law enforcement agencies within the Department of Justice; however, the SEC often works closely with such agencies to provide evidence and assist with court proceedings.

All of these government agencies seek to regulate and protect those who participate in the respective industries they govern. Their areas of coverage often overlap; but while their policies may vary, federal agencies usually supersede state agencies. However, this does not mean that state agencies wield less power, as their responsibilities and authorities are far-reaching.

Understanding the regulation of the banking, securities and insurance industry can be confusing. While most people will never deal directly with these agencies, they will affect their lives at some time. This is especially true of the Federal Reserve, which has a strong hand in influencing liquidity, interest rates and credit markets. They are an independent government agency that Congress oversees. The commission has primary authority for communications law, regulation, and technological innovation.

On the FCC website, the consumer can file complaints, public comments, and public safety reports. For example, the FDIC insures deposits, monitors financial institutions for safety, soundness and consumer protection and more.

This gives the public confidence that their money is safe. In turn, this promotes confidence in the banking system and stability in the economy. Federal Election Commission FEC — The mission of this independent federal regulatory agency is to administer and enforce the Federal Election Campaign Act, which governs the financing of federal elections.

The FEC is responsible for disclosing campaign finance information and enforcing the provisions of the law. Examples include the limits and prohibitions on contributions, and to oversee the public funding of Presidential elections. Department of Transportation that supports State and local governments. Mainly, they provide support in the design, construction, and maintenance of the United States highway system.

In addition, they provide support for federally and tribal-owned lands. Department of Transportation focused on intermodal transportation. Also, the FTC is responsible for informing consumer choice and creating a greater public understanding of the competitive process. The FDA accomplishes its mission by ensuring the safety and security of both human and veterinary drugs. In addition, this includes biological products, and medical devices, cosmetics, tobacco products, and more.

For example, this includes renewable energy technologies and market-based solutions that strengthen U. United States Nuclear Regulatory Commission NRC — The NRC is an independent agency that is responsible for ensuring the safe use of radioactive materials for beneficial civilian purposes while protecting people and the environment. Primarily, the NRC regulates commercial nuclear power plants and other uses of nuclear materials.

For example, they monitor nuclear medicine, through licensing, inspection, and enforcement of its requirements. Its purpose was to monitor and control unfair business practices by railroad companies. However, the Commission ceased operations in