Managing Regulatory System with Megamodelling

Digital transformation accelerates the development of business ecosystems, and leads to increasing cross-domain and cross-sectoral business interconnections. While the regulatory environment is traditionally managed within fragmented sectoral silos, integrating those increasing business interconnections causes the introduction of cross-market domain regulations and multi-sectoral obligations to regulate such ecosystems. The above-mentioned developments challenge already established regulatory practices and create necessity to manage the emergence of cross-market systemic risks and control their propagation and more importantly help regulatory bodies in their policy making. Managing interconnected risks requires to break regulation silos while integrating the perspectives of all actors. In this paper, we propose an approach and an architecture to support risk-based policy cycle within regulatory system. The approach is centred on the principles of megamodelling, and in particular the concept of Regulatory megamodel. While megamodel is intended to allow for and manage a macroscopic view over the regulatory system, with all its complexities, it also accommodates individual actors to gain insight into locally relevant concerns, however not ignoring cross-domain and cross-market implications and dependencies. This is expected to facilitate compliance reporting, control processes and monitoring for the actors involved. In particular, we believe the major potential of such an approach lies in allowing regulator(s) to gain insights when it comes to cost-effective policy making, and to optimising the entire policy cycle.