Cholamandalam Investment and Finance Company, a Chennai-based NBFC, has reduced its technology spending in FY25 to ₹101 crore, marking a 5% decline from the previous year. This decrease comes after three consecutive years of heavy technology-led expansion, during which the company’s tech spends had risen significantly. In FY24, the company’s tech spends had increased by 49% to ₹106 crore, following a 43% jump in FY23 and a 51% surge in FY22.
The company’s executives attribute the earlier phase of accelerated spending to a deliberate push to build a digital-first backbone. Over the last three years, Cholamandalam has digitised customer onboarding, deployed AI-driven risk scoring, automated loan origination, and strengthened collections via mobile-led solutions. However, the company is now shifting its focus from investing in new technologies to extracting greater value from its existing platforms.
This recalibration is part of a broader trend across the NBFC sector, with market leaders such as Bajaj Finance and Shriram Finance also shifting away from large-scale capital expenditures. Instead, they are focusing on embedding analytics in decision-making, cross-selling to existing customers, and expanding their reach in Tier-II and Tier-III markets. Industry analysts believe that this moderation signals a new phase in the sector’s digital journey, where companies are now focusing on sweating their assets, embedding AI/ML into underwriting, and monetising customer data.
For Cholamandalam, technology remains central to its strategy, despite the slowdown in spending. The company is sharpening its focus on first-time borrowers, MSMEs, and rural markets, where digital sourcing and risk management provide competitive advantages. Partnerships with fintechs, enhanced mobile-first collections, and analytics-driven credit decisions are expected to power the next leg of growth. Increased automation has also improved efficiency by streamlining processes and cutting processing times.
By moderating its tech spends and doubling down on data-driven efficiencies, Cholamandalam is positioning itself for sustainable growth at a time when credit demand and competition among lenders are intensifying. The company’s assets under management (AUM) have exceeded ₹1.6 trillion, and it is well-placed to leverage its digital capabilities to drive future growth. Overall, Cholamandalam’s decision to reduce its technology spending is a strategic move to focus on extracting greater value from its existing platforms and driving sustainable growth in the long term.