The Relativity of Disruption: E-banking as a Sustaining Innovation in the Banking Industry

Clayton Christensen’s Disruptive Innovation Theory (DIT) is one of the most renowned frameworks in strategic management. One important question discussed in the context of this theory is whether the Internet and also the business models of pure e-banks constitute a disruptive innovation to the retail banking industry. The objective of this paper is to address this question by conceptually analyzing the case of Nordea Bank (Scandinavia), an incumbent that has over the last decade enjoyed extraordinary success in e-banking. The paper first demonstrates how the Internet has been a sustaining innovation at Nordea and then concludes that pure e-banks are unlikely to create a disruptive innovation in the retail banking industry.