disintermediation

(redirected from Disintermediate)
Also found in: Dictionary, Encyclopedia.

Disintermediation

Withdrawal of funds from a financial_institution in order to invest them directly.

Disintermediation

The act of making a withdrawal from a bank or other financial institution in order to use the funds for investment purposes. For example, one may withdraw $10,000 from his savings account in order to buy a stock without the bank's intermediation. This has become less common with deregulation of banking because more banks can offer investment services, reducing the incentive to withdraw.

disintermediation

The withdrawal of funds from financial intermediaries such as banks, thrifts, and life insurance companies in order to invest directly with ultimate users. Disintermediation was more of a problem when financial intermediaries were limited in the returns they could pay to savers. Deregulation of financial intermediaries was intended to dampen the periodic swings toward disintermediation. Compare intermediation.

disintermediation

a situation where a FINANCIAL INTERMEDIARY such as a BUILDING SOCIETY is forced to reduce its lending operations because of the withdrawal of deposits from it and because it is unable to attract new funds. Disintermediation usually occurs (and then only temporarily) when an intermediary (see INTERMEDIATION) fails to adjust its borrowing rates on deposits promptly when interest rates rise, so its rates are insufficiently competitive vis-à-vis other deposit-taking institutions.

disintermediation

The situation that exists when depositors withdraw their savings from financial institutions and invest the money directly in the marketplace,usually because they can obtain a higher yield even though also running a higher risk of losing their money.

Mentioned in ?
References in periodicals archive ?
In case of Emergent Fintech, market players are rather disruptors and innovators who disintermediate incumbent financial services firms or offer new technology solutions to service existing requirements [8].
We expect that supply chains will evolve to disintermediate non-value-adding partners and that most of the early-mover e-SCIs will thrive.
Government has customers, too, and these customers have the power to disintermediate.
One ironic twist is that small rural thrifts whose depositors were too unsophisticated to disintermediate (and their officials too traditional to take risks, go for brokered deposits, or understand junk bonds?
amp;nbsp;Blockchain's transparency and automation can provide the means to disintermediate the market with a peer-to-peer risk platform that helps insurance return to its roots as society's safety net.
Even 3D printing highlights how the plans for the object will allow us to disintermediate the manufacturer.
Firstly the incumbents will get displaced by new entrants offering a better customer experience and price, second that their revenues will be diminished in a market of higher switching frequency as they're relegated to undifferentiated utilities, before finally their core competency of storing and transferring value is challenged by the arrival of a new technology - blockchain will disintermediate the banks completely.
He added: "It is not our goal to disintermediate financial institutions.
In short, IT should attempt to disintermediate itself from its own supply chain.
Everybody wants to disintermediate everybody else, and that's how it should be.
I haven't seen anyone come out and say they are going to disintermediate retailers.