Why has Capitolis's novation service seen a 30% drop in transaction volume over the past quarter?

Introduction

Capitolis's novation service has experienced a significant 30% drop in transaction volume over the past quarter, raising concerns about the product's performance and market position. To address this issue, I'll employ a systematic approach to identify, validate, and address the root cause while considering both immediate and long-term implications for the business.

Step 1

Clarifying Questions (3 minutes)

• Looking at the timing, I'm thinking there might be seasonal factors at play. Has this 30% drop been compared to the same quarter last year?

Why it matters: Seasonal trends could explain the volume decrease without indicating a deeper problem. Expected answer: Yes, it's been compared and the drop is still significant. Impact on approach: If seasonal, we'd focus on long-term trends rather than immediate fixes.

• Considering user segments, I'm curious about the distribution of the volume drop. Is the 30% decrease uniform across all user types or concentrated in specific segments?

Why it matters: Identifying affected segments helps pinpoint potential causes and tailor solutions. Expected answer: The drop is more pronounced in institutional clients. Impact on approach: We'd prioritize investigating factors affecting institutional users.

• Regarding recent changes, have there been any significant updates to the novation service or related systems in the past quarter?

Why it matters: Recent changes could directly impact user behavior and transaction volume. Expected answer: A new UI was rolled out for institutional clients two months ago. Impact on approach: We'd focus on the UI change's impact on institutional users' workflow.

• Thinking about market conditions, has there been any notable shift in the financial markets that could affect novation demand?

Why it matters: External market factors could explain the volume decrease independently of product issues. Expected answer: There's been some market volatility, but nothing extraordinary. Impact on approach: We'd consider market factors as a contributing, but not primary, cause.