As banks have increased the use of technology over the past 20 years,
A)noninterest income as a percent of total operating income has approximately doubled.
B)there has been a decrease in the importance of both Fedwire and CHIPS.
C)there has been an increase in negative net present value because of the speed in which rivals can replicate innovations.
D)banks no longer need to consolidate because they can access customers worldwide through internet services.

Question

Quizplus · Accepted Answer

The increased use of technology has allowed banks to increase their noninterest income, such as fees for online banking and ATM usage, which has led to a growth in noninterest income as a percent of total operating income.

Answer: B
 Fedwire and CHIPS are still important payment systems for banks, and the increased use of technology has only made them more efficient and effective.

Answer: C
 The increased use of technology has led to faster replication of innovations, which can lead to a decrease in net present value if competitors are able to quickly adopt and offer similar technologies or services.

Answer: D
 The increased use of technology has allowed banks to reach customers worldwide through internet services, but it has not eliminated the need for banks to consolidate. Consolidation can still provide cost savings and improved efficiency for banks.

As Banks Have Increased the Use of Technology Over the Past