Securitization is a financial process where various types of assets, like mortgages or loans, are pooled together and converted into securities. These securities can then be sold to investors, allowing the original lenders to receive immediate cash. This process helps spread risk and provides liquidity in the financial market. By transforming assets into tradable securities, securitization makes it easier for banks and other financial institutions to manage their balance sheets. Investors benefit by gaining access to a diversified portfolio of assets, while borrowers can often secure better financing options. Overall, securitization plays a crucial role in modern finance.