The study commendably assessed the effect of financial innovation on the imperative performance of the commercial banks in Kenya. Innovation diffusion theory in addition to technology acceptance model, importantly agency theory shaped the foundation of the study. The independent variables in the utilization were agency banking, mobile banking, together with Automated Teller Machine (ATM) banking. The control variable employed included capital adequacy with the ROA being the only dependent variable. The provision of the weakness and strength of various literature reviews on the research study provided a better insight and basis on how to effectively address the recognized gaps in the research. This study utilized a descriptive and inferential research design. Entire 42 registered commercial banks in Kenya formed the target population. The secondary data was highly employed and it entailed data on the numbers of transactions in agency banking, the value of transactions in mobile banking, the number of ATM networks, together with capital adequacy ratios. The secondary data were gathered with data collection sheets from various published annual reports on Kenyan commercial banks from 2012 to 2019. The statistical software utilized in the study for data analysis was SPSS v.22. A subsist relationship to financial innovation and banks' performance was subjected to Pearson Correlation, multiple regression analysis, and ANOVA. The F-tests together with T-tests were utilized to decide on the assigned variables association. R square was established as 0.541 which implied that 54.1% of the changes in explanatory variables were subjected to the total variation of the performance of the Kenyan banks. The results of the correlation analysis showed that ATM banking, agency banking, together with capital adequacy possess positive correspondence with the bank's imperative performance, while mobile banking had a negative correlation with the commercial banks performance. It was concluded from study that only the agency banking together with capital adequacy were established to be statistically significant. Besides, ATM banking together with mobile banking were established to be statistically insignificant in the performance of the commercial banks in Kenya. It was greatly acclaimed that commercial banks to intensify in agency banking since it was established to possess great substantial outcome on the bank's performances. Additionally, commercial banks are required to capitalize on efficient technological systems and to effectively manage the capital level in the bank to enhance the earnings and profitability of the banks.

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