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Economies of Compliancy, an opportunity for leadership and chatbots

The Economies of Compliancy is an emergent economics term that describes a competitive advantage of sharing practical regulatory knowledge and practices across entities. By means of a utility-based cloud service, business, non-profit or government, can lower their compliance costs and reduce the risks of non-conformance. For example, the cost of using a utility is less than individual entities each reinventing the compliance wheel. This has been achieved by one tech titan to address at least 40% of the regulatory requirements related to GDPR (European Union General Data Protection Regulation), which was achieved through rearchitecting its software-as-a-service offerings at a granularity that is mind boggling.   


The Economies of Compliancy model puts a spotlight into the compliance modus operandi that is hardwired into institutional thinking. For example, the volume, variety and velocity of regulatory change has led to a sizeable and growing gap between system processes and knowledge work performed. According to a Thomson Reuters study there were over 50,000 regulatory updates worldwide in 2015 specific to the financial services industry. This increasingly complex know how is adversely affecting productivity and performance. The traditions of paper and electronic documents containing corporate regulatory know how and processes are no longer fit for purpose.



  1. Difficult to use
  2. Easy to misuse 


The situation is compounded as these regulatory derived documents have not been subject to usability tests. Nor is it possible to measure the user decision journeys through these documents involving an ever-growing volume of choices, pathways and outcomes.


The overall problem is further compounded as there is a chasm between institutional perception and reality. Organisations have stringent controls for managing this type of regulatory-based documentation, including signatories for approving changes, with checks and balances embedded within their operations, risk and audit capabilities. However, as already covered, it is the substance of the document’s content that is problematic as they contain flawed algorithmic structures, which are not visible to conventional controls.


The Economies of Compliancy is a fertile ground for chatbots to be the core of many regulatory utilities that are needed. The shift towards conversation-as-a-service to mask the increasing regulatory complexity from the customer, employee and other stakeholders is no longer a technology challenge.


Economies of Compliancy needs leadership from business, non-profit, government and academia to nurture and evolve the many opportunities that await.




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Freddie McMahon

Freddie McMahon

Director Strategy and Innovation

DF2020 Ltd

Member since

04 Aug 2017



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