16-49 How can operating expenses of an FI be reduced by improved technological efficiency?
A)By improving the efficiency of management of information flows.
B)By obtaining access to low cost sources of funds.
C)By linking services to the quality of the FI's technology.
D)By innovating new interest earning products.
E)By complying with all government regulations.

Question

Quizplus · Accepted Answer

Improved technological efficiency can lead to better management of information flows within the FI, resulting in cost savings from reduced labor, paperwork, and processing time. This can also lead to better customer service and increased productivity.  Access to low-cost funds (B) and offering innovative products (D) may increase revenue or profitability but do not directly reduce operating expenses. Linking services to the quality of the FI's technology (C) may increase customer satisfaction but does not necessarily reduce operating expenses. Compliance with government regulations (E) is necessary but does not reduce operating expenses.

16-49 How Can Operating Expenses of an FI Be Reduced