Voice of the CFO: Being Prepared Is Big Part of Job
Rajesh Gupta, CFO
CFO of OakNorth, Rajesh Gupta, speaks to PYMNTS as part of its ‘A day in the life of a digital-first CFO’ series, to talk through his key roles and responsibilities at OakNorth Bank and OakNorth Credit Intelligence, as well as the various challenges he faces on a day to day basis.
Over the last five years, the U.K. has seen Brexit, the pandemic and now the Russia-Ukraine war that is impacting all economies.
“I do think that, though, ultimately, the challenges that you face through all of these scenarios do end up being pretty similar from a CFO’s life perspective from about 30 years back — when I started my career — to today,” Gupta said.
Gupta joined OakNorth Bank, a commercial bank that serves businesses across Britain, in January 2021. Before that, he was CFO at specialist lender Kensington Mortgages for five and a half years and held various positions at General Electric for the prior 21 years.
Facing the Challenges of the CFO
Speaking as part of the PYMNTS series “A Day in the Life of a Digital-First CFO,” Gupta said that the first challenge for a CFO amid unpredictability is supporting business strategy and supporting the CEO and the business in thinking through the right options.
The second challenge is making sure that they have the right talent.
“Getting the right talent in this day and age, with the changes in technology and the changes in environment around us — which are somewhat unprecedented — is not the easiest thing,” Gupta said.
The third challenge is determining how well their financial controls are running — which is important because they are the parameter by which the world judges how a business is performing.
“From my vantage, I think, once again, there’s such rapid strides in the world of technology that is supporting all of this, staying on top of that is always a constant challenge for a CFO,” Gupta said.
Using Technology, Data
One example of the application of technology at OakNorth Bank is on the business side, enabling the bank to give its clients a quick answer when they apply for a loan.
Using technology and data, the bank can quickly understand the client’s sector, business model and how the client would fare under different scenarios. This is prepared over the course of a few hours or a couple of days.
In a second part of this process, representatives of the bank meet with the client face to face and gauge the caliber of the management, the quality of their thinking, the energy that they have and other intangibles.
“The speed with which we are able to respond to the customer, the understanding we have of the customer’s business model that allows us to structure the loan appropriately for them, that is what our technology, our data, allows us to do in a very efficient fashion — compared to some of our competitors where people may take two, three months to even get a decision,” Gupta said.
On the consumer savings side, OakNorth Bank offers a web tool and a mobile app through which most of the interactions happen and supports those with an operations team that will take calls to answer any complex questions that come up.
“[Keeping the customer] requires a sustained customer experience, which is affordable through these mobile and web tools,” Gupta said.
Considering the Future of Remote Work
Like other organizations, OakNorth Bank is working through the question of having people continue working remotely. Gupta noted that some companies are going into full flexibility while others believe collaboration doesn’t work as well remotely and want people in the office more often than not.
OakNorth Bank is a little more flexible now but has people coming into the office more than half the time. Like everyone else, the bank is experimenting and trying to learn from it, Gupta said.
“The one thing that remote working has helped is it has reduced the risk of business interruption,” Gupta said. “So, if there is a train strike, if there is another pandemic, if there is something else, we all know how to make sure that the customer gets served.”
Watching for the Unexpected
Another challenge all organizations are facing are the current macroeconomic headwinds. For financial services institutions, the concerns are growth and credit quality Gupta said.
Credit quality is not a worry at OakNorth Bank because it has already been factoring inflation into its models and using that insight to better manage its customers.
Growth is an area of concern because there’s already uncertainty out there, and uncertainty means people delay decisions or slow projects they had expected to start.
At the same time, the unemployment rates in the U.K. are at an all-time low and housing prices are holding steady. If those remain as they are, a recession probably won’t be as impactful as it could be, Gupta said.
Gupta added that CFOs must always be on the watch for the unexpected and the uncertain — as has been seen with Brexit, the pandemic and the war.
“That is the one learning we have had since 2008 and onwards, the next crisis is not the one you expect — it’s something totally different.”