Financial innovation has replaced the driving forces of promoting economic growth and considered as front runner by various nations for its acceleration. Achieving high quality economic growth with maintaining its sustainability is burning issue and financial innovation is the key for opening the path of this journey. The aspiration for making more profit by searching new ways is the main reason behind the occurrence of financial innovation. Financial innovation has provided many new financial products to the financial institutions and also stands as a strong pillar for financial development as well. The concept which is strategic in nature will prove worthwhile only if it will facilitate sustainability in the financial sector of an economy. This paper has aimed at understanding the concept of financial innovation and discussing the various segments where it is prevalent and exploring.