Why AI in Lending Must Keep Humans in the Loop

"AI Cannot Replace Human Judgment in Lending": Sunil Govindarajan Advocates for Governance-First AI Integration in Finance

India, 29 May 2026: With financial institutions rapidly integrating AI into underwriting, fraud prevention, and credit assessment, Sunil Govindarajan, CRO/Director at Optimo Capital, is urging caution regarding fully autonomous lending models, emphasizing the necessity of human oversight and robust governance.

During a panel on Digital Transformation & AI Integration at the CXO Summit & Awards 2026, Sunil noted that although AI offers substantial gains in operational efficiency and predictive accuracy for lenders, firms must prioritize explainability, auditability, and consistent human validation.

"In lending, speed without governance can become a risk multiplier. AI should strengthen decision-making, not replace accountability," said Sunil Govindarajan during the discussion.

Leveraging more than 20 years of expertise in risk strategy, underwriting, and lending—which includes scaling various lending portfolios across Indian NBFCs—Sunil identified the potential for AI to transform India’s mortgage sector, specifically by streamlining underwriting and property valuation workflows.

He observed that India’s mortgage-to-GDP ratio is still well below that of developed nations, presenting a significant opening for tech-driven innovation. In his view, AI-driven valuation tools and benchmark-based assessments can mitigate fraud risks, accelerate turnaround times, and bolster confidence in lending, particularly within Tier-3 and emerging markets where verifying operations is often difficult.

A central theme of Sunil’s remarks was the imperative for governance-focused AI deployment within financial institutions and NBFCs. He stressed that any AI utilized for underwriting, fraud detection, reporting, or enterprise risk management must be transparent, explainable, logic-based, and fully auditable.

He also discussed the broader application of AI across the financial services lifecycle, spanning loan origination, underwriting, collections, compliance reporting, and enterprise risk oversight. While acknowledging that AI can minimize manual tasks and enhance predictive power, he maintained that data integrity, governance structures, and human supervision are essential safeguards.

At the event, Sunil Govindarajan received the CXO Leadership Excellence Award, honoring his significant contributions to credit strategy, risk management, and the lending sector.

Throughout the session, Sunil reiterated the necessity for lending systems built on governance, where technology facilitates quicker, more informed decisions without sacrificing underwriting discipline, accountability, or the quality of long-term assets.

With a background covering MSME financing, loan against property, credit operations, and enterprise risk management, Sunil has been instrumental in developing and expanding various lending portfolios across India’s financial sector.

About Sunil Govindarajan

Sunil Govindarajan is a risk management and lending expert with over two decades of experience in credit strategy, MSME financing, underwriting, and enterprise risk management. Currently serving as Chief Risk Officer at Optimo Capital and Director at Nipun Projects and Finance Private Limited, he has been pivotal in scaling multiple lending businesses and credit portfolios across Indian NBFCs. His expertise encompasses responsible AI adoption in finance, risk strategy, loan against property (LAP), and governance-led lending.