Why has BNY's Pershing clearing and custody service seen a 15% drop in new account openings over the past quarter?

Introduction

The 15% drop in new account openings for BNY's Pershing clearing and custody service over the past quarter is a significant issue that requires immediate attention. This decline could have far-reaching implications for the company's market position and financial performance. To address this problem, I'll employ a systematic approach to identify, validate, and resolve the root cause while considering both short-term fixes and long-term strategic implications.

Step 1

Clarifying Questions (3 minutes)

• Looking at the timing, I'm thinking there might be seasonal factors at play. Has this 15% drop been adjusted for typical quarterly fluctuations?

Why it matters: Seasonal patterns could mask underlying issues or exaggerate the problem. Expected answer: Yes, this drop is beyond normal seasonal variations. Impact on approach: If seasonal, we'd focus on year-over-year comparisons instead of quarter-over-quarter.

• Considering the competitive landscape, have there been any significant changes in competitor offerings or market dynamics?

Why it matters: External factors could be driving clients to other services. Expected answer: No major changes in competitor offerings have been observed. Impact on approach: If competitors have improved offerings, we'd need to reassess our value proposition.

• Regarding internal changes, have there been any recent modifications to the onboarding process or account opening requirements?

Why it matters: Internal changes could inadvertently create friction in the account opening process. Expected answer: Some minor updates were made to compliance checks. Impact on approach: If internal changes are the cause, we'd focus on optimizing these processes.

• Thinking about client segments, is this drop consistent across all client types, or is it more pronounced in specific segments?

Why it matters: Different segments may have different needs or be affected by different factors. Expected answer: The drop is more significant in the small to medium-sized business segment. Impact on approach: If segment-specific, we'd tailor our solutions to the most affected client types.