You're head of strategy at a large bank in Mexico City. A fintech is growing fast and the board is nervous: some want to copy all its features right away, others dismiss it as a toy for customers you don't care about. You know the right question isn't whether the fintech looks flashy, but whether its model is structurally different —or just a layer of better design over the same economics—.
The situation
Disruption theory distinguishes two things that get conflated. A sustaining innovation improves the experience on top of the same economic model —a prettier app, a faster sign-up—: the incumbent can copy it or buy the startup, and the advantage erodes. A genuine disruption attacks with a structurally cheaper model a segment the incumbent ignores (the unbanked, micro-merchants, remittances), and climbs from there toward the mainstream market.
Here's the trap, in both directions. If you copy a true disruptor's features onto your platform, you fail: you can't match its cost structure without cannibalizing your own business. And if you dismiss the disruptor because it's small and low-margin today —"customers we don't want"—, you make the incumbent's classic mistake: you ignore it right up until it has grown big enough to come for your core. The right answer isn't a single one: it depends on what kind of entrant this is. Diagnose first; respond after.