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Purpose: This study investigated the effect of Technological innovation strategy on the competitiveness of Kenyan commercial banks. The study was anchored on Schumpeter’s Innovation Theory, the Value Innovation Theory and innovation diffusion Theory. Methodology: The study adopted a positivist philosophy and descriptive-correlational design. Primary data were collected from bank executives, complemented by secondary data from the Central Bank of Kenya. Findings: Bivariate regression analysis established that product innovation strategy has a positive and statistically significant effect on competitiveness F(1,134) = 74.983, p < .001. Using data from innovation-focused executives across 39 licensed banks, competitiveness was measured through market share, return on equity and customer satisfaction. Technological innovation was assessed through adoption of new systems, Integration of digital channels and use of Artificial Intelligence and data analytics. A simple linear regression analysis was conducted to test the hypothesis that technological innovation significantly influences bank competitiveness. The results indicated a positive and statistically significant relationship between technological innovation and competitiveness, suggesting that while technology adoption is critical. Unique Contribution to Theory, Policy and Practice: The findings contributes to knowledge, policy, and practice by demonstrating that technological innovation strategies, when effectively implemented, provide measurable competitive advantages for banks, thereby extending theoretical understanding of innovation in emerging markets. It offers policymakers evidence-based insights to develop supportive frameworks for technology adoption, fintech collaborations, and AI integration, while guiding banking practitioners on aligning technological investments with strategic objectives to enhance market share, profitability, and customer satisfaction.