A major wave of digitisation sweeping through the lending sector is leading to a surge in demand for Chief Digital Officers (CDOs), according to a recent report by Venator Search Partners, India’s leading banking CXO search firm. The report highlights significant transformations in technology, risk, and sales functions within banks and Non-Banking Financial Companies (NBFCs), driving the need for digital leadership.
The survey conducted by Venator Search Partners gathered insights from over 60 senior professionals, including CEOs, Business Heads, and HR Heads from large NBFCs, Banks, and Fintech companies. The sample also included consultants from the Big 4 and digital experts, providing a comprehensive view of the industry’s current state.
The survey revealed that 38% of respondents believe that risk management will undergo significant transformation, closely followed by technology at 20%. The driving force behind this transformation is the enhanced credit risk assessment capabilities provided by big data and AI, which are 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,” the report stated. This shift reflects the industry’s move towards algorithms and machine learning models that automate the evaluation process based on predefined criteria.
The report also highlighted the evolution from traditional business models to “phygital” models—a blend of physical and digital approaches. Survey respondents indicated that the phygital model is expected to be a lasting trend in the industry.
“Most respondents felt that ‘Feet on the Street’ are becoming enablers to close transactions by every passing day. While the number of leads gets generated online, the dropouts are significantly high, resulting in poor conversion ratios 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,” said Deepraditya Datta, Founder of Venator Search Partners.
With the rapid technological evolution, the role of the Chief Digital Officer (CDO) has become increasingly critical. The CDO is tasked with revolutionising lending processes and ensuring a positive and tangible return on investment.
“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,” the report concluded.