FINANCIAL INNOVATION AND THE BANKING INDUSTRY

This study investigates the impact of financial innovation on the Nigerian banking industry, with a focus on its effects on customer satisfaction, retention, and patronage, as well as the challenges customers face when using innovative banking services. A total of 200 questionnaires were distributed among bank customers in Benin City, Edo State, of which 100 were completed and analyzed using SPSS version 20.0, employing both descriptive statistics and regression tests. The findings indicate that financial innovation significantly enhances customer satisfaction (B = 0.666, t = 16.821, p = .000) and influences customer patronage (B = 0.152, t = 2.815, p = .005), but has an insignificant impact on customer retention (B = 0.085, t = 1.223, p = .222). Moreover, the study reveals notable challenges including technical issues, security concerns, delays in transaction processing, and slow complaint resolution. Based on these results, it is recommended that banks continue to invest in user-friendly digital platforms, integrate personalized customer relationship management strategies to improve retention, employ targeted marketing to enhance patronage, and upgrade their IT infrastructure to address operational challenges.