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14 Dec 2023, 07:00
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Difficulty:
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41% (02:05) correct
59%
(02:24)
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based on 218
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12 Days of Christmas 🎅 GMAT Competition with Lots of Questions & Fun
A leading software company recently introduced an advanced cybersecurity software package specifically tailored for large financial institutions. Despite its enhanced security features and compatibility with existing systems, many of these institutions have not adopted the software, even when offered substantial discounts undercutting the competition.
Which of the following, if true, most helps to explain the financial institutions' reluctance to adopt the new cybersecurity software?
(A) The financial institutions are generally conservative in adopting new technology due to the potential risks associated with system transitions and prefer to use software with a proven track record.
(B) Most of these financial institutions have recently invested in multi-year licenses for other cybersecurity solutions, making a switch to new software financially unfeasible.
(C) The new software, while advanced, requires a significant amount of training for IT staff, a resource that many financial institutions are currently lacking.
(D) Financial institutions prioritize cybersecurity but are hesitant to implement new solutions that have not yet been tested extensively in real-world scenarios.
(E) The cybersecurity software market is rapidly evolving, with frequent updates and new products, leading many institutions to adopt a wait-and-see approach to avoid premature commitment to a specific solution.
A leading software company recently introduced an advanced cybersecurity software package specifically tailored for large financial institutions. Despite its enhanced security features and compatibility with existing systems, many of these institutions have not adopted the software, even when offered substantial discounts undercutting the competition.
Which of the following, if true, most helps to explain the financial institutions' reluctance to adopt the new cybersecurity software?
(A) The financial institutions are generally conservative in adopting new technology due to the potential risks associated with system transitions and prefer to use software with a proven track record.
(B) Most of these financial institutions have recently invested in multi-year licenses for other cybersecurity solutions, making a switch to new software financially unfeasible.
(C) The new software, while advanced, requires a significant amount of training for IT staff, a resource that many financial institutions are currently lacking.
(D) Financial institutions prioritize cybersecurity but are hesitant to implement new solutions that have not yet been tested extensively in real-world scenarios.
(E) The cybersecurity software market is rapidly evolving, with frequent updates and new products, leading many institutions to adopt a wait-and-see approach to avoid premature commitment to a specific solution.
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14 Dec 2023, 08:00
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Bunuel
GMAT Club's Official Explanation:
The best answer to this question is (B).
B. Most of these financial institutions have recently invested in multi-year licenses for other cybersecurity solutions, making a switch to new software financially unfeasible.
- This choice directly addresses why the financial institutions might be reluctant to adopt the new cybersecurity software, despite its advanced features and compatibility. If these institutions have already invested in multi-year licenses for other solutions, it would be financially impractical for them to switch to a new product, regardless of the discounts offered. This choice provides a clear, specific reason that aligns with the institutions' behavior.
The other options, while plausible, are not as directly aligned with the scenario as (B):
A. The financial institutions are generally conservative in adopting new technology due to the potential risks associated with system transitions and prefer to use software with a proven track record.
- While this is a valid concern, it is more general and does not specifically address the scenario of the institutions not adopting the new software despite its benefits.
C. The new software, while advanced, requires a significant amount of training for IT staff, a resource that many financial institutions are currently lacking.
- This option introduces the challenge of training but does not directly connect to the reluctance to adopt the software, especially in the context of the offered discounts.
D. Financial institutions prioritize cybersecurity but are hesitant to implement new solutions that have not yet been tested extensively in real-world scenarios.
- This choice addresses a general concern about the adoption of new technology but lacks the specificity needed to explain the institutions' behavior in this scenario.
E. The cybersecurity software market is rapidly evolving, with frequent updates and new products, leading many institutions to adopt a wait-and-see approach to avoid premature commitment to a specific solution.
- While this explains a cautious approach, it does not directly address the reluctance to adopt this specific new software despite its stated advantages.
Therefore, choice (B) most effectively explains the financial institutions' reluctance to adopt the new cybersecurity software, considering their existing investments in other solutions.
General Discussion
vishal_gupta
Joined: 11 May 2023
Last visit: 14 Jun 2025
Posts: 78
Given Kudos: 46
Location: India
Concentration: General Management, Strategy
Schools: Yale '27 Booth '27 HEC '26 INSEAD '26 LBS '26 IIM IIM Kellog '27 Judge '26 Said '27 Tuck '27 Stern '27 ISB '27
GMAT Focus 1: 675 Q88 V81 DI82 
GPA: 76%
WE:Engineering (Non-Profit and Government)
14 Dec 2023, 08:46
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Which of the following, if true, most helps to explain the financial institutions' reluctance to adopt the new cybersecurity software?
(A) The financial institutions are generally conservative in adopting new technology due to the potential risks associated with system transitions and prefer to use software with a proven track record. (Nothing in the passage it is mentioned that the advance technology is not proven.)
(B) Most of these financial institutions have recently invested in multi-year licenses for other cybersecurity solutions, making a switch to new software financially unfeasible. (Correct. This is the most explainable reason for financial institute action. They are bound financially)
(C) The new software, while advanced, requires a significant amount of training for IT staff, a resource that many financial institutions are currently lacking. (It can't be assumed that the new software is complex to use.)
(D) Financial institutions prioritize cybersecurity but are hesitant to implement new solutions that have not yet been tested extensively in real-world scenarios. (Same as A.)
(E) The cybersecurity software market is rapidly evolving, with frequent updates and new products, leading many institutions to adopt a wait-and-see approach to avoid premature commitment to a specific solution. (But still, without using the advance software, they can technically lag behind its competitor.)
(A) The financial institutions are generally conservative in adopting new technology due to the potential risks associated with system transitions and prefer to use software with a proven track record. (Nothing in the passage it is mentioned that the advance technology is not proven.)
(B) Most of these financial institutions have recently invested in multi-year licenses for other cybersecurity solutions, making a switch to new software financially unfeasible. (Correct. This is the most explainable reason for financial institute action. They are bound financially)
(C) The new software, while advanced, requires a significant amount of training for IT staff, a resource that many financial institutions are currently lacking. (It can't be assumed that the new software is complex to use.)
(D) Financial institutions prioritize cybersecurity but are hesitant to implement new solutions that have not yet been tested extensively in real-world scenarios. (Same as A.)
(E) The cybersecurity software market is rapidly evolving, with frequent updates and new products, leading many institutions to adopt a wait-and-see approach to avoid premature commitment to a specific solution. (But still, without using the advance software, they can technically lag behind its competitor.)
