What factors are contributing to the sudden increase in abandoned applications for Berkshire Bank's home equity lines of credit this month?

Introduction

The sudden increase in abandoned applications for Berkshire Bank's home equity lines of credit (HELOCs) this month is a critical issue that demands immediate attention. This analysis will systematically identify, validate, and address the root cause while considering both short-term and long-term implications for the bank's product strategy.

I'll approach this problem by first clarifying the context, then ruling out external factors before diving deep into the product journey, metric breakdown, and data analysis. From there, I'll form hypotheses, conduct root cause analysis, and propose validation methods and solutions.

Step 1

Clarifying Questions (3 minutes)

• Looking at the timing, I'm thinking there might be a recent change in the application process. Has there been any update to the HELOC application flow in the past month?

Why it matters: Recent changes often correlate with sudden metric shifts. Expected answer: Yes, we updated the credit check step. Impact on approach: If yes, I'd focus on that specific change; if no, I'd look at broader factors.

• Considering user segments, I'm curious about the demographics affected. Are we seeing this increase across all applicant types, or is it concentrated in specific groups?

Why it matters: Helps identify if it's a universal issue or specific to certain users. Expected answer: It's primarily affecting applicants over 50. Impact on approach: If segmented, I'd investigate that group's unique challenges; if universal, I'd look at system-wide issues.

• Thinking about the competitive landscape, have there been any significant changes in competitor HELOC offerings recently?

Why it matters: External market forces can dramatically impact user behavior. Expected answer: One major competitor launched a lower-rate product. Impact on approach: If yes, I'd consider our market positioning; if no, I'd focus more on internal factors.

• Considering the application funnel, at which stage are we seeing the highest drop-off rate?

Why it matters: Pinpoints where in the process users are encountering issues. Expected answer: Most abandonment occurs at the document upload stage. Impact on approach: I'd focus my investigation on that specific stage and its recent changes or issues.