Why can the emergence of commercial banks reduce the cost of commercial transactions?

Commercial banks belong to financial institutions. The emergence of financial institutions has alleviated the moral hazard and adverse selection caused by matching cost and information asymmetry to a certain extent.

Through financial institutions, borrowers and borrowers do not directly reach a transaction, depositors directly deposit money in banks, while borrowers directly obtain funds from banks instead of depositors.

As a financial institution, banks can conduct professional supervision and examination of borrowers. Because the number of borrowers inspected is very large, banks are specialized and programmed, resulting in economies of scale and naturally reducing costs.