This study examines the impact of financial innovation on the performance of Nigerian deposit money banks over the period from 2012Q1 to 2022Q4, focusing on key financial service channels: Automated Teller Machines (ATM), Point of Sale (POS), Web-based electronic banking (WEB), Mobile Money Operations (MMO), National Electronic Funds Transfer (NEFT), alongside traditional banking performance. The Autoregressive Distributed Lag (ARDL) model, and cointegration analysis confirms a long-run equilibrium relationship among the variables. The ARDL results demonstrate that ATM and web-based banking positively and significantly enhance banking performance in both the short and long run, with web banking exhibiting a notably strong effect. In contrast, Mobile Money Operations and National Electronic Funds Transfer show significant negative impacts, likely due to operational inefficiencies, while POS transactions remain statistically insignificant across both periods. These findings partly align with existing literature, reflecting the heterogeneous effects of financial innovations in Nigeria’s banking sector. Robustness checks, including diagnostic and stability tests, validate the model’s reliability for forecasting and policy formulation. The study concludes that optimizing digital financial services requires targeted policy interventions to improve the efficiency of Mobile Money and fund transfer platforms and to strengthen web-based banking through enhanced cybersecurity and digital literacy. Based on the conclusion the following recommendations were made; Improve Mobile Money and NEFT platforms by upgrading infrastructure and enhancing user experience to address inefficiencies. Strengthen web-based banking through better cybersecurity, user-friendly design, and increased digital literacy to boost adoption and performance