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Finance: What is Disintermediation? 9 Views
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What is Disintermediation? The process by which an institutional investor withdraws its funds from intermediary financial companies, such as broker dealers, to invest directly is called disintermediation. Private corporations that may decide to setup an in-house investment department to clear directly and more efficiently handle its portfolio, such as in family institutions, will sometimes set up their own clearing and hire a portfolio manager who can execute trades directly with the Street.
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Transcript
- 00:00
finance a la shmoop what is disintermediation? all right people amazon
- 00:08
disintermediated the book industry then the DVD industry and pretty much well [Amazon pacman eating books and CD's]
- 00:13
every industry including groceries and soon cars life insurance and robotic
- 00:18
Russian brides not kidding is coming disintermediation happens when one
- 00:23
company with a better value proposition to a group of customers inserts itself
Full Transcript
- 00:28
between that customer and the old sellers or old ways of doing business [New company appears in between store and old company]
- 00:33
well the value proposition can be based on price like when threshing machines
- 00:38
used for the harvesting of farm products simply made competition with farms using
- 00:44
human labor well, a losing battle the machines ended up being way cheaper
- 00:48
so automated farms could deliver you know sorghum to whoever buys sorghum [People shovelling sorghum]
- 00:54
what what is sorghum anyway that's what happens when you don't brush your teeth
- 00:58
or whatever anyway and they delivered it at half the price of the cost of human
- 01:02
delivered sorghum yeah that's disintermediation all right well think
- 01:05
about what the automobile industry did to the horses breeding industry not to [Horse galloping on a track and race car drives by]
- 01:10
mention the automobile breeding industry and it happened in the modern highly
- 01:14
rival risk internet world as well think about what Google search did to Yahoo in
- 01:19
more recent years and yeah Starbucks well it seems safe for now but what [Starbucks employee making coffee]
- 01:24
about when coffee tube comes along allowing all of us to inject espresso
- 01:28
via IV into our blood streams remember the best part of waking up is coffee [man singing about coffee]
- 01:34
tube in your veins then a commercial remember that song
- 01:38
ask your parents
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