Disintermediation

Disintermediation,

Definition of Disintermediation:

  1. Reduction in the use of intermediaries between producers and consumers, for example by investing directly in the securities market rather than through a bank.

  2. Disintermediation can also lower the overall cost involved in completing transactions. Removing the intermediary may also allow a transaction to go through more quickly.

  3. Internet: Elimination (by the online sources) of the traditional middleman the intermediary between the seller and the buyer (such as an agent, broker, or reseller), or between the source and the recipient of information (such as an agency, official, or gate keeper).

  4. Disintermediation is the process of removing the middleman or intermediary from future transactions. In finance, disintermediation is the withdrawal of funds from intermediary financial institutions, such as banks and savings and loan associations, to invest them directly.

  5. Finance: Elimination of financial intermediaries (banks, brokers, finance houses) between the suppliers of funds (savers/investors) and the users of funds (borrowers/investees). Disintermediation occurs when inflation rates are high but bank interest rates are stagnant (usually due to government control), and the bank depositors can get better returns by investing in mutual funds or in securities. When interest rates start to rise, the investors turn again into depositors and reintermediation occurs.

How to use Disintermediation in a sentence?

  1. Along with financial disintermediation, investment relative to GDP declined over time.
  2. Disintermediation is when you remove middlemen from a supply chain or decision-making process.
  3. Disintermediation can reduce cost and increase efficiency, but it usually requires more due diligence work.
  4. In financial terms, it is the removal of banks, brokers, or other intermediaries to invest directly.
  5. If you can build up enough capital to disintermediation yourself from those you used to borrow from you will save alot.
  6. The disintermediation was vital to running an efficient business for our firm and we made new relationships that should last for years as well.
  7. I didnt realize all the disintermediation that was going on by the investors and the borrowers because they didnt want a middle man involved.

Meaning of Disintermediation & Disintermediation Definition