Regulating Innovation: The Role of Law in Shaping Business Transformation
- AIOR Admin
- 7 hours ago
- 1 min read
Ogochukwu C. Nweke, Gordian I. Nweke, Samuel C Mocha
Regent University College of Science and Technology, Capella University, Colorado Technical University
Innovation has become a central driver of business transformation, particularly in sectors such as financial technology (FinTech) and artificial intelligence (AI)-enabled services, where digital tools are rapidly reshaping markets, organisational structures, and value creation processes. Innovation is beneficial because it is associated with efficiency, inclusion and competitiveness, but at the same time, it creates regulatory uncertainty, legal risk, and governance challenges. This article discusses the impact of law to drive innovation-oriented business change, in particular, how legal/regulatory frameworks facilitate and limit the development of new business models in FinTech and AI-intensive service sectors. The article uses a doctrinal research approach to examine statutes, regulatory tools, judicial rulings, and policy frameworks that are involved in the governance of innovation, focusing on the areas of data protection, financial regulation, competition law, intellectual property, and corporate governance. The article concludes that law is not just a limitation of innovation, but rather a pivotal infrastructure that organises markets, regulates risk and develops trust. Regulatory sandboxes, risk-based supervision, and principles-based regulation are adaptive regulatory instruments that are displayed to be decisive in mitigating uncertainty, as well as protecting the interests of the public. This article holds that the success of business transformation is pegged on the compatibility of the legal design with the innovation strategy. It ends by providing some recommendations to regulators and firms to encourage responsible innovation, enhance legal certainty, and make compliance a strategic capability in the transformation of businesses