Navigating the Regulatory Labyrinth: Compliance Dilemmas and Lead User Innovation in the Fintech Sector

This research article deals with the lead user innovation difficulties in the Kenyan financial technology sector, specifying the regulatory compliance challenges. The flourishing of fintech firms in diverse aspects and sectors have faced numerous dilemmas, particularly in intellectual property, privacy and consumer safety regulations which may lead to lack of adherence. The consequences of non-compliance can be severe, including legal penalties and reputational damage. Despite the importance of innovation in fintech companies, the dilemmas innovators face in navigating regulatory compliance is not yet fully investigated. This research adopts and employs a sequential mixed-method approach that allows complex connection of lead users and regulators in terms of compliance. Survey data from 321 lead users and in-depth interviews with 36 lead users and five regulators revealed a range of compliance challenges. Intellectual property laws scored the least adherence, with the plethora of regulations and overseeing bodies contributing to increased non-compliance. The outcomes highlight the pressing compliance issues faced by lead users and underscore the potential of regulatory bodies to bolster adherence. The outcomes indicate the need for a different approach to regulatory compliance by lead users. This paper underscores the necessity of cooperative engagement between innovators and regulators to effectively maneuver through the dynamic compliance landscape of the financial technology industry.