ACCA Applied Knowledge · Business and Technology · Technological factors
A bank replaces most branch-based counter services with a mobile app that lets customers open accounts, transfer funds and apply for loans at any time. Which effect of technology on services does this best illustrate?
The mobile app illustrates disintermediation of the branch channel and continuous customer access. Customers deal directly with the bank at any time, so physical branches become less necessary. It is not vertical integration, higher entry barriers or a move into manufacturing.
- ADisintermediation of the branch channel and round-the-clock access for customersCorrect
- BVertical integration of the bank with its suppliers
- CIncreased barriers to entry through economies of scale in branch networks
- DA shift from a service business to a manufacturing business
Explanation
Technology allows customers to deal with the bank directly through a digital channel, removing the need for branch intermediaries and giving 24/7 access. Vertical integration concerns owning supply or distribution stages, not this change. Technology here tends to lower, not raise, entry barriers.
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