Counterpoint



Counterpoint

Introduction

The financial intermediaries consist of all those financial institutions which are engaged in providing customers with financial services. The role of information technology which has arisen from the development and increase in the use of computers has increased profoundly in the past decade and has hence led to evolvement of the financial intermediaries (Charles & Sanford, 1994). The information technology has been and is always a change facilitator in the case of the financial industry and the financial services offered. The increase in the use of information technology has changed the financial industry of the world at large and has brought in significant opportunities to be availed by the financial institutions and particularly the financial intermediaries. The emerging role of information technology has led to the development of new financial services which are based on technology. The changes brought in the financial services offered by the financial intermediaries have largely been due to the change in the economic situations and due to the change in the needs of the customers of the financial industry. Therefore, our discussion will focus on the counterpoint that the increased role of technology and the evolvement of new financial technologies have not led to the extinction of the extinction of the financial intermediaries (Horne, 2012).

Discussion

The information technologies in financial markets have been used in large extent for the purpose of communication and for the enhancement of the financial services. The information technologies have been used by the financial intermediaries to implement new financial services which are provided in unique ways. The example of brokerage firms can be used here which have been using the new information technologies to run the money markets and mutual funds. Likewise, the banks are also highly depending on the need of information technologies and technologies for communication to enable them to operate and be functional though out the financial year. The securities dealers likewise have developed systems that help in the transferring of funds anywhere in the world (Gennaioli, 2012).

The development of the information technology infrastructures have led to the change in the overall structure of the financial industry. The financial intermediaries are engaged in the process of increasing their services offered and are trying to differentiate themselves from the other financial intermediaries in terms of their services offered therefore the industry has seen a significant change in the financial services offered. Moreover, because of the easy availability of information processing technologies to the financial intermediaries in this modern era the barriers to entry in the financial industry have been reduced which has resulted in a number of financial intermediaries to enter the financial market. Many small financial intermediaries have proved to be successful and have been able to compete their larger counterparts by offering specialized financial services, as opposed to their larger counterparts which have been providing general financial services in the financial markets. The information technology has enabled the financial intermediaries to communicate and transfer their messages, reports and information more accurately and precisely in order ...