The cutoff point depends on the business objective. Depending on the goals of your business, the cutoff point needs to be selected. For example, let’s consider loan defaults. If the business objective is to reduce the loss, then the specificity needs to be high. If the aim is to increase the profits, then it is an entirely different matter. It may not be the case that profits will increase by avoiding giving loans to all predicted default cases.
But it may be the case that the business has to disburse loans to default cases that are slightly less risky to increase the profits. In such a case, a different cutoff point, which maximises profit, will be required. In most of the instances, businesses will operate around many constraints. The cutoff point that satisfies the business objective will not be the same with and without limitations. The cutoff point needs to be selected considering all these points. If the business context doesn't matter much and you want to create a balanced model, then you use an ROC curve to see the tradeoff between sensitivity and specificity and accordingly choose an optimal cutoff point where both these values along with accuracy are decent.
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