How to analyze the disruptive potential of business model innovation in two-sided markets?: The case of peer to peer lending marketplaces in Germany

Since the financial crisis, established banks have to deal with different challenges. The lack of confidence of bank customers in established banking business models leads to increasing interest in alternative solutions and models in the financial industry. In the area of personal and small business loans and investment, peer to peer (p2p) lending offers an online-based transparent granting of credits between individuals without much need for traditional banking services. These p2p lending marketplaces provides private lenders and investors a more user-centric and interactive digitization of their lending and investing operations. Therefore, the questions arise whether p2p lending represents a disruptive threat for established banks and how the disruptive potential can be analyzed in this context. Since previous approaches did not pay enough attention to the business model aspect linked to disruption in services, we propose further improvement especially in case of two-sided markets which might display different levels of disruptive potential on each market side. We illustrate this enhanced theoretical approach by applying it to the case of p2p lending marketplaces in Germany. Finally, we provide a modified method and research implications together with managerial options for the future of the retail banking industry in the German context. Future research should analyze this approach in other contexts such as other p2p lending markets or similar industries.