What does the term 'disintermediation' refer to?

The term 'disintermediation' refers to the removal of intermediaries from a transaction. In financial contexts, this typically means that individuals or businesses can engage directly with one another without the need for a third party, such as a bank or broker, to facilitate the exchange. This concept has gained prominence with the rise of technologies like blockchain and peer-to-peer payment systems, which allow direct transactions, thus enhancing transparency and potentially reducing costs associated with intermediary services.

This is particularly relevant in discussions about how the financial services industry is evolving, especially with the advent of fintech. By eliminating intermediaries, disintermediation can lead to improved transaction efficiencies and provide users greater control over their financial dealings.