How can noninterest 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.

Question

Quizplus · Accepted Answer

Noninterest operating expenses refer to expenses incurred by an FI that are not related to interest income or interest expenses. Examples include salaries, rent, utilities, and technology costs. By improving the efficiency of management of information flows, an FI can reduce its technology costs and other operating expenses associated with manual processing of information. This can be achieved through the use of automated systems, such as online banking platforms and automated teller machines (ATMs), which can reduce the need for manual processing and human intervention. By reducing technology costs, an FI can improve its efficiency and reduce its noninterest operating expenses. Therefore, option A is the correct answer.

How Can Noninterest Operating Expenses of an FI Be Reduced