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disintermediation Definition

☆ dis·in·ter·me·di·a·tion (dis′in′tər mē′dē ā′s̸hən)

noun

the withdrawal of funds from banks and savings institutions in order to invest them in government securities, commercial paper, etc. paying higher rates of interest

disintermediation Finance Definition

The removal of a middleman from a transaction. This term was used in the 1970s when relatively wealthy investors realized they could invest their funds directly in money market funds to earn higher interest rates and cut their bank out from the transaction. Disinter-mediation is also used in other industries where middlemen can be eliminated. With the advent of the Internet, disintermediation can also occur when a company selling its product online bypasses traditional distribution channels and directly links with buyers and suppliers.

disintermediation Usage Examples

Adjective modifier

ict-enabled: Discuss the pros and cons of ICT-enabled disintermediation vs. ICT-enabled reintermediation in the provision of ethical trade data and ethical trade services to consumers.