Financial regulators are increasingly turning to data, analytics and technology to enhance their ability to oversee markets.

The U.K.’s Financial Conduct Authority (FCA) unveiled a plan on Tuesday to become a “highly data-driven” regulator by making greater use of advanced analytics and automation.

The FCA said that it intends to lean more heavily on data and technology to “deepen its understanding of how markets function and allow the FCA to efficiently predict, monitor and respond to firm and market issues.”

As part of its planned strategic transformation, the FCA said that it will also be investing in skills training and establishing new data science units in certain departments.

“Advances in technology are changing the nature of the firms and markets we regulate. Our data strategy provides a clear path for us to ensure we have the necessary skills and processes in place to remain at the forefront of this change,” said Christopher Woolard, executive director of strategy and competition at the FCA.

“A data-driven approach to regulation allows us to anticipate harms before they crystallise, better understand the effect on consumers of changing business models and to regulate an increasing number of firms efficiently and effectively,” he added.

The Bank of England has also published a discussion paper that outlines its plans to beef up its data and analytics capabilities.

“Having the right data is vital to our role as a regulator, and to the ability of banks and insurers to manage themselves effectively. Recent developments in technology should allow us to improve how we collect data from firms, making reporting more timely, more effective and less burdensome for firms,” said Sam Woods, deputy governor for prudential regulation and CEO of the Prudential Regulation Authority (PRA).

“This is potentially a major change so we want to work closely with firms to make sure we get it right over the next decade – our discussion paper starts that process by setting out the strategic issues in order to stimulate a debate about the way forward,” he added.

Additionally, the FCA, the Bank of England and seven firms jointly published a report on a pilot project for digital regulatory reporting, which would allow firms to automatically supply data to regulators, in an effort to reduce the cost of data collection, improve data quality, and reducing the regulatory burden on firms.