Step 3: Engage stakeholders

It should be noted that there should be a greater degree of alignment in terms of focus between internal and external considerations, without neglecting one for another. However, external parties can play an essential role in enabling the successful development and implementation of RegTech and SupTech solutions. External technology solutions vendors, with their vast knowledge of IT and SupTech systems, can be instrumental in helping a regulator deal with rapid changes in technology and overcoming limited in-house technical skills and resources. Strategic partners often provide financial resources and technical assistance to promote awareness and implementation efforts related to RegTech, SupTech and financial inclusion, especially in developing countries with few well-developed success stories. Moreover, through their constant contact with regulators, donors can be influential in obtaining buy-in and support from regulators and market participants.

Implementing RegTech or SupTech solutions is most effective when financial policymakers and regulators can involve other regulators, and even market participants, in the early stages of identifying areas of improvement, all the way through the development and launch of the end product.

Collaboration with other regulators and departments within the central bank can be achieved using a consultative approach to managing the various steps in the framework above. For instance, a steering committee can be set up to include representatives from all supervisory departments so that the development of the solution will be more inclusive of different regulatory perspectives and concerns.

Preferably, potential managers and users of the system can be brought on early in the process to be involved with the design of the solution. To improve collaboration with supervised entities, it is essential to have open dialogue and discussion channels with the central bank and regulators. The formation of an advisory group with representatives from supervised entities can be an effective way for regulators to receive feedback and recommendations, and communicate policy goals and the planned action steps to reach them. It will also be important to conduct stakeholder interviews with organizations working on Gender Inclusive Finance (GIF), inclusion of disproportionately excluded segments including youth, older people, MSMEs, FDPs, etc. to understand opportunities to address the peculiar gaps and financial exclusion instances for these segments.