Digital solutions for regulatory compliance through data

Expected Outcome and Deliverables

• Delivering three or four separate projects on the streamlining of regulatory reporting through automated and trusted sharing of compliance data, each demonstrating how the governance and technical aspects as well as the legal and processing aspects have been addressed.
• Each project will deliver a pilot in realistic operational conditions and a live presentation (demo) of the pilot use case by the participants as well as a final report.
• The project outcomes, including the developed solutions, will have to be disseminated to relevant stakeholders, such as public administrations and private entities (in particular SMEs), showcasing the benefits of streamlining compliance processes and reducing administrative burdens.

Objective

The complexity and volume of reporting requirements stemming from EU legislation are growing, posing difficulties for both regulatory bodies to enforce laws and for public and private entities trying to comply. These challenges underscore the need for innovative solutions to streamline compliance processes and enhance competitiveness within the EU.

This objective will support projects testing digital solutions for transmitting information relevant for compliance with EU legislation (e.g. regulations on environmental issues) and automate the compliance process for a number of pilot use cases.

Regulatory reporting requirements cover a wide range of information, from aggregate (e.g. company balance sheets) to granular representing individual transactions and events, and in many situations also on the identification and (pre-market) registration of products. Such detailed data is often already routinely and automatically recorded in the systems of businesses, sometimes to meet regulatory requirements, but in many cases for their own management purposes. In other cases data can be captured automatically from business processes and devices and, with the right technical solutions in place, such data could be used for automatic compliance.

Activities funded under this objective would combine advanced technologies such as data capturing technologies, automatic transmission and analysis, cloud storage, and encryption to ensure data security, confidentiality and regulatory adherence. By integrating comprehensive APIs, the projects will facilitate real-time compliance and self-compliance checks, they will provide common terminology to define and describe the meaning of reported data as well as standards and formats for the reported data while machine learning algorithms will automate monitoring and reporting. Crucially, direct communication with regulatory authorities enables automated updates and reporting, ensuring the system remains current with evolving regulations. This approach emphasizes robust access control and audit trails for transparency, while significantly reducing the risk of non-compliance and the associated penalties. It would also make use of the EU Digital Identity Wallet, when available, to ensure identification of natural persons and legal entities active in data spaces as well as other relevant trust services, such as electronic seals or ledgers.

It will be essential to propose use cases that allow the data to be automatically collected and processed with minimal manual intervention, and to ensure that the compliance verification process is both efficient and scalable.

Sectors with a high bureaucratic burden such as agriculture, environment, manufacturing, healthcare, and energy, are examples of possible pilot use cases to be funded.

Consortia can consist of public administrations such as government bodies/ regulatory agencies, private entities or a mix of the two.

Scope

The activities funded under this initiative will focus on the following aspects:

• Technical aspects:
  • Utilize advanced technologies such as data capturing technologies, automatic transmission and analysis, cloud storage and encryption for data security and compliance with regulations.
  • Implement comprehensive APIs to enable real-time compliance and self-compliance checks.
  • Employ machine learning algorithms for automated monitoring and reporting.
  • Where possible use precisely defined concepts available in the data catalogue entries of common European data spaces enabling deterministic data collection.
  • Establish direct communication channels with regulatory authorities for automated updates and reporting, keeping the system updated with changing regulations (e.g. by expressing the reporting requirements in machine readable and executable way).
  • Ensure robust access control and maintain audit trails for transparency and accountability.
  • Minimize the risk of non-compliance and potential penalties through these technological and procedural safeguards.
  • Integrate the EU Digital Identity Wallet for secure identification of individuals and legal entities.
• All systems must incorporate robust data privacy and security measures.
• Proposers must ensure that the systems developed are open source, interoperable with existing government data systems and adhere to European data standards and specifications.
• The system must be scalable to handle large volumes of data and high transaction rates.
• The system must be designed with end-users in mind, ensuring ease of use and accessibility.
• A comprehensive data governance framework must be established. This should include policies for data quality management, data stewardship, and data lifecycle management.
• Active engagement with all relevant stakeholders is essential.
• Proposals should target legislations that have clear, quantifiable compliance metrics that can be automatically assessed using data analytics and they should ensure no overlaps with ongoing initiatives (e.g. Digital Product Passport, Customs reform).