Big digitisation wave in lending, leads to high demand for CDOs: Venator Search Partners report

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Technology, risk, and sales functions in banks and NBFCs witnessing transformation and hence the need for hiring CDOs (Chief Digital Officers), according to a survey conducted by India’s leading banking CXO search firm Venator Search Partners.

More than 60 senior industry professionals from lending institutions including CEO’s, Business Heads, HR Heads from large NBFC’s, Banks & Fintechs were part of the survey. The sample size also included consultants from Big 4 and digital experts.

Over 38% of the respondents believe that risk management, followed by technology at 20%, will undergo significant transformation. The survey attributes the transformation to enhanced credit risk assessment capabilities of big data and AI, leading to more accurate risk profiling and better predictions of loan defaults.

Respondents mentioned that the method for assessing risk has changed. It now stands at 4 or above on a 6-point scale, indicating that traditional credit assessment is no longer used for loan approvals.

Lenders are now using algorithms and machine learning models to automate the evaluation process based on predefined criteria. This enables organisations to quickly determine which customers meet the requirements for pre-approved offers based on their financial behaviours as well as to identify potential customers who are likely to be interested in specific financial products, thereby increasing the relevance and effectiveness.

Digitalisation has also led to the evolution of a traditional business model to a “phygital” one. Survey respondents revealed that the phygital model is expected to remain here for some time.

Most respondents felt that ‘Feet on the Street’ are becoming enablers to close transactions by every passing day. “While the number of leads get generated online, the dropouts are significantly high resulting in poor conversion ratio often. We believe that ‘feet on the street’ can play a critical role to close sales. We see the sales function transforming to becoming more of facilitators as digitisation catches pace,” Deepraditya Datta, Founder, Venator Search Partners.

With the evolution of technology, the Chief Digital Officer or the CDO is the new kid on the block. His job is to revolutionise lending, and his success depends on proving a positive and tangible return on investment.