 In order to understand the transaction costs and the role of financial intermediaries, we need to understand that when we are involving the financial intermediaries, they help us in cutting down the transaction costs because they are subject to economies of scale and we know what is meant by economies of scale. That means that when we are doing a certain thing at a higher level or a greater scale, then the per unit cost becomes low. So when we are involving a financial intermediary or a financial intermediary is doing that transaction on our behalf, they are subject to economies of scale and as a result the money, the transaction costs they incur can be on average, can be lesser than the transaction cost which will be incurred if you are doing it on your own. So if you are doing a certain investment or you are doing the buying and selling on your own, it may be costly as compared to if you involve a financial institution and they do it on your behalf they are subject to economies of scale and that can make a lot of difference. So economies of financial intermediaries, since they are subject to economies of scale, they help us in cutting down the transaction costs and that helps us or that makes the financial intermediaries role significant for us. They become important in the financial structure because through them we can cut down the transaction costs. Another important thing that can be utilized by having another advantage of getting the things done through the financial intermediary is that the financial intermediaries have certain expertise in different areas which we are not. So an investor might not be having a proper understanding of the financial entry cases or the legal legalities involved in the transaction process or there could be some infrastructure that is needed in order to do a certain type of business. So or we can say that they can have a strong information technology setup that can help them in facilitating or fastening the entire process of selling or purchase. So if we are talking in terms of an individual company or an individual investor, he might not have an exposure to all these important factors that can help you in speeding up the entire process of buying or selling a financial instrument. So if you are getting it done through the financial intermediary, it helps you because they have developed the expertise. So simply we can say that through financial intermediaries or through banks or through some other financial institution, they execute their business. So then because of the economies of scale or because they have developed the structure of IT in different areas or they have experts sitting there, using that expertise, your work can be done more quickly and in a better way. Because they have certain areas that they have developed to facilitate people. And when you bear low transaction costs, less expenses as transaction costs, so naturally your net profit will be higher. So people find it comfortable, convenient and more profitable by getting their things done through the financial intermediaries. And that indicates the significance of the financial structure or the financial institutions which helps you in reducing the transaction costs. Because all these expertise and economies of scale reduce the transaction costs, they can have a higher level of liquidity. It is easy for them to manage liquidity. It is relatively easy for them to have cash available as compared to if you are going to do all these things yourself. So all these things indicate that financial intermediaries or banks or any other financial institutions make it so easy for us. They also cut the expenses for us. And they also fasten the process for us. So this indicates the significance or the important role that is played by the financial institution.