In the rapidly evolving financial services landscape, innovation has emerged as a strategic imperative for commercial banks striving to enhance customer satisfaction and foster long-term retention. This study investigates how innovation—across products, processes, and service delivery—affects customer satisfaction and loyalty in the context of commercial banking institutions operating in the Mfoundi Division of Cameroon. Drawing on a mixed-methods research design, both qualitative interviews and quantitative survey data were collected from bank staff and customers across major branches in the region. The study explores key dimensions of innovation including digital banking, mobile payment platforms, personalized service technologies, and innovative customer relationship management (CRM) systems. Results indicate that banks that actively invest in digital transformation, seamless user experience, and personalized banking services enjoy higher levels of customer satisfaction and significantly improved retention rates. Furthermore, the study identifies trust, ease of technology use, and responsiveness to customer needs as critical mediators in the innovation-satisfaction-retention relationship. The findings underscore the need for commercial banks in Cameroon, and similar emerging economies, to adopt a proactive innovation strategy not only as a competitive differentiator but also as a pathway to building stronger, more resilient customer relationships. The study concludes by offering strategic recommendations for bank managers and policymakers aimed at fostering an innovation-oriented service culture, enhancing customer experience, and driving sustainable banking growth in the Mfoundi Division and beyond.