Managing Disruptive Innovation Through Service Systems The Case of Crowdlending in the Banking Industry

The Internet has affected and partially radically changed the business models of traditional industries. Crowdfunding as a new concept of funding over the Internet by a large crowd has especially gained maturity. Crowdfunding offerings range from funding charitable projects or innovative gadgets to a funding alternative for start-ups or small businesses. Therefore, crowdfunding represents an innovative way to provide liquidity for illiquid markets. With regard to the banking crisis and the growing skepticism toward banks, crowdfunding is seen as a more transparent, democratic, and entertaining way of funding, which makes it highly attractive for banks. A senior innovation manager of The Bank of Switzerland (TBOS), one of Switzerland’s largest and most traditional banks, recognized the disruptive and beneficial potential of crowdlending. By facing strong resentments, he developed the idea of TBOS engaging in crowdlending by collaborating with a start-up by bundling competencies in a service system.