First, the availability of information technology has reduced the cost of information collection and maintenance considerably. Thus, a widespread belief has arisen that information on credit quality of small borrowers who may be widely dispersed across jurisdictions can be made impersonal, packaged, processed, and sold.
Second, with the availability of such technology, and the belief that such information was available on a structured basis, a great deal of financial innovation could take place which essentially enabled the investor or risk taker to become progressively remote from the ultimate borrowers where the actual risks lay.