Strategic Innovation and Process Optimisation of Banking System in Selected Deposit Money Banks in Lagos, Nigeria

Despite significant technological investments and reforms, deposit money banks in Nigeria continue to experience operational inefficiencies such as delays in service delivery, human errors, and weak integration of digital systems, while managerial efforts to address these challenges and achieve sustained process optimisation have largely proven inadequate and insufficient. This study, therefore, examined the effect of strategic innovation on process optimisation in selected deposit money banks in Lagos State, Nigeria. The study was underpinned by Innovation Diffusion Theory and Resource-Based Theory. Specifically, it investigated the influence of banking innovation culture, value-driven strategy, and market-oriented culture on process optimisation. A quantitative research approach with a survey design was adopted. The population comprised 24,424 employees from four selected banks. Using Yamane’s formula, a sample size of 394 respondents was determined, out of which 336 valid responses were obtained. Data were collected using a structured questionnaire and analysed using descriptive statistics and multiple linear regression with the aid of SPSS version 25. The findings revealed that banking innovation culture and value-driven strategy have significant but negative effects on process optimisation, while market-oriented culture has a significant positive effect. Furthermore, the combined effect of strategic innovation measures on process optimisation was found to be significant. The study concludes that although strategic innovation is critical for enhancing process optimisation, its effectiveness depends on proper alignment and integration with operational processes. The study recommends that deposit money banks adopt an integrated approach to innovation by aligning innovation initiatives with operational systems, strengthening market-oriented practices, and ensuring that value-driven strategies are implemented in ways that enhance efficiency rather than create process complexities.