Regulatory simplification: the case for regulatory technology leadership in the EU

In the era of cloud computing and AI, it is paradoxical that Europe's legislative machinery still functions with the mindset of Napoleonic times. Today, laws are drafted on computers, stored in official journals, and published online. Yet despite these modern tools, the approach to regulation remains stubbornly analogue. Laws accumulate over decades, producing unintended bureaucratic burdens and rendering the system opaque. Neither citizens nor lawmakers can easily track the interactions between rules, making compliance difficult and trust in institutions fragile.

Europe's regulatory framework resembles a dense spaghetti bowl - complex and overlapping. Despite the digital tools available to manage this complexity, the system remains entangled.

According to Eurostat, the EU’s recurring administrative costs amounted to approximately €150 billion in 2022. A significant portion of this burden stems from its complexity, incohorence and cumulative weight. If the public, businesses, and even regulators struggle to understand the system, how can they be expected to follow it?

Enter #RegTech - regulatory technology - a digital solution that promises to transform this spaghetti bowl into a coherent, navigable plate. RegTech tools can visualize the regulatory landscape, trace interactions between laws, and reduce the time and cost of compliance. Crucially, they can help reintroduce the principles Napoleon once championed: clarity, simplicity, and rationality.

Some EU Member States have already made strides. In the Czech Republic, for example, the public administration uses a single, unique e-tool covering the entire process of creating legislation – from the initial idea, through the development of related documents such as the regulatory impact assessment, and an overview of public obligations, to publication in the Collection of Laws, including the central management of templates and correlation tables for implementing European law. Its legislative process also includes an obligation that new law must include a summary of the obligations it introduces (not in force yet). This innovative step allows to convert legislative language into actionable obligations, forming the foundation of a metadata database that can be used to automate understanding and compliance.

In 2016, the Czech Chamber of Commerce developed a tool to help businesses comply with legislation across sectors with the help of the above-mentioned innovative approach. It deciphers regulatory requirements, saves time and money, and helps companies stay compliant. Meanwhile, Estonia offers another model - sourcing data directly from business registers rather than requiring companies to submit it repeatedly. This practice streamlines bureaucracy and reduces duplication.

So why is RegTech not standard at the EU level?

The challenge is not technical but institutional. RegTech solutions must be embedded into the regulatory process, and that requires leadership and coordination - something currently lacking at the EU level. Responsibilities are fragmented: regulatory oversight lies with the Secretariat-General, simplification with Commissioner Dombrovskis, digital sovereignty with Executive Vice-President Henna Virkkunen, and business engagement with Executive Vice-President Stéphane Séjourné. Innovators in the private sector, where most RegTech ideas originate, often find themselves shuffled between departments, with no clear point of contact or leadership.

Perhaps RegTech was not well understood when the EU’s institutional structure was designed. Beyond structure, this is about mindset. Embracing RegTech requires a mental shift - from seeing digital tools as optional add-ons to recognizing them as foundational to effective governance. Not only would regulators benefit, but so too would citizens, businesses, and the broader European economy.

Globally, RegTech is a rising force - and whoever masters it will gain a strategic advantage. But this advantage comes with responsibility and the need for ethical aspects. If we wait too long, we risk ceding both innovation and control to others, with unpredictable consequences.

Europe already has the tools and early success stories. What it needs now is a RegTech chief - someone to assemble the puzzle, break down silos, and bring 21st-century thinking to 21st-century governance. The private sector is here - and ready to help.

By Alena Mastantuono, EESC Employers' Group member and Rapporteur of Opinion INT/1088 Regulatory simplification – the use of digital tools in better law-making.