An intermediary is an entity that provides a link between two or more parties for the purpose of exchanging information, resources, or products. This can include organizations, such as banks, or individuals, such as brokers. Intermediaries provide a service by transferring information, goods and services between buyers and sellers.
Intermediaries typically have access to resources or expertise not held by either of the two parties in the transaction. For example, a financial intermediary can provide advice on how to find the best loan option for the borrower, or how to invest funds for the investor.
Intermediaries also serve as monitors to prevent fraud, misunderstandings, and asymmetric information. An intermediary can also provide facilitation services such as managing the collection and delivery of goods or services. In addition to providing a financial service, an intermediary may offer additional services such as preparing documents, managing legal processes, or representing the parties in court in case of a dispute.
Intermediaries can also help to build trust between the two parties in a transaction, since they have knowledge of and experience with the process. An intermediary can be both a facilitator and a negotiator between the two parties, helping them to bridge any gaps between their needs and objectives.
By providing a neutral point between the two parties, an intermediary can ensure that both parties are making informed decisions, and ensure that any agreement reached is in everyone’s best interest.