Utility Week

8 | 28TH FEBRUARY - 5TH MARCH 2020 | UTILITY WEEK Policy & Regulation RegTech is changing therules of the game Game-changing software technology promises to bring clarity and simplicity to what can be a minefi eld of regulatory compliance rules. Chief executive's view Alex Goody, Gemserv T here can be little debate about the need for leader- ship across the energy sector to address dangerous climate change. There is perhaps more debate over how this should manifest itself. One thing is clear, modernised governance and regulation, t for the 21st century, will have an essential role in achieving net zero. Gone are the days of large regulatory and compli- ance teams poring over mountains of requirements. It's not that market rules are no longer needed – though certainly more can be done to reduce current complex- ity, volume and approach – it's the way that rules are curated, modi ed and accessed by those who abide by them that must also change. It's happening already, yet largely led by other sec- tors. Most notably in nancial services with a prolifera- tion of RegTech companies bringing order to regulatory complexity using modern technology. A key driver is cost reduction. Up to 30 per cent savings have been achieved through reduction in regulatory teams and other compliance costs. Companies have also bene ted from a reduced risk of non-compliance because the technology has kept abreast of ever-changing regulatory requirements and how these are implemented through an organisation's corporate policies. In its simplest form, RegTech can digitise the vast number of regulations, standards, codes of practice and other rules, making them searchable by keyword and other criteria. That's all pretty basic document manage- ment, I hear you say, but add to this the curation of rules into "use cases" which return only the require- ments needed for a company's circumstances or activ- ity and you begin to unlock the real value. Likewise, the ability to administer modi cations to the rules via the RegTech platform. This enables a more inclusive approach because it is possible to reach all market participants online, tailoring engagement to their interests, collat- ing their views, and running voting and administration in a transparent way. Modi cations to rules in one part of the market will oŠ en have a consequen- tial impact on rules in another – no problem – the technology will track this, making sure that it is not missed. Build in a link to corporate policies – the internal practices and procedures necessary for implementation and compliance – and you have an eŒ cient, end-to-end service. One challenge that all industries face is the loss of insight from key staŽ retiring or leaving. In policy, compliance and governance functions, these insights can underpin a competitive advantage or unique selling point. RegTech platforms help address this challenge, crystallising corporate knowledge and experience into the document management environment so new starters can be impactful sooner. Gemserv has long advocated the vision of a single energy market portal to help reduce barriers to entry and the compliance burden faced by market participants. Under this vision, the myriad of regulation, licensing requirements and codes, together with their associated delivery bodies, would be largely hidden from view. Instead, market participants and other interested parties would have a single site from which to understand the rules of the market, the modi cation process, helpdesk and so on, and it was encouraging to see this idea discussed in the government's code review consultation published last summer. Gemserv is now turning this vision into practice. We launched CodeWorks in September 2019 to bring RegTech into the energy industry so that we could quickly and collaboratively help unpick some of the regulatory challenges in moving to net zero. We have digitised the Smart Energy Code (SEC) along with how modi cations, reviews and authorisations are managed for this code. The SEC governs the UK's smart meter rollout and CodeWorks has proven popular with users. This is being further developed as part of a bigger push to make available through the site all of the main energy market rules, including Ofgem's licensing require- ments and other codes – creating a one-stop shop for the market, and a step closer to our vision for a single market˜portal. CodeWorks is but one example of many where Gemserv is transforming its business model. In this case we are combining our established governance capabili- ties with technology to deliver better client and market outcomes. Like all businesses, we need to continuously evolve in the face of unprecedented market disruption and the climate emergency. ments needed for a company's circumstances or activ-

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