Michael S H Heng
New information technologies and emerging business forces have triggered a new wave of financial innovation－electronic banking (e-banking). This study utilizes an innovation model to analyze the impact of e-banking on the incumbent banks. The results indicate that the nature of e-banking innovation is disruptive, leading to drastic changes in both technological knowledge and business model. We further identify eight core capabilities that are necessary for the banks to cope with the change, each appearing to address either technical or business aspects of e-banking transformation. The findings have the potential to contribute to the understanding of impacts occurring in the change associated with e-banking and offer rich insights for the incumbent banks to exploit e-banking opportunities.