What factors are causing the decline in new Desjardins Group credit card applications compared to the same quarter last year?

Introduction

The decline in new Desjardins Group credit card applications compared to the same quarter last year is a concerning trend that requires thorough investigation. 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 Desjardins Group's credit card business.

Step 1

Clarifying Questions (3 minutes)

• Looking at the timing, I'm thinking there might be seasonal factors at play. Has there been any change in the typical seasonality of credit card applications for Desjardins Group?

Why it matters: Seasonal patterns could explain the year-over-year decline and help us differentiate between cyclical and structural issues. Expected answer: No significant change in seasonality. Impact on approach: If seasonality has changed, we'd need to investigate why; if not, we'll focus on other factors.

• Considering recent economic shifts, I'm wondering about changes in the target demographic. Has there been any significant shift in the credit profiles or income levels of applicants compared to last year?

Why it matters: Economic factors could be impacting the eligibility or interest of potential applicants. Expected answer: Some shift towards lower credit scores or income levels. Impact on approach: If confirmed, we'd need to examine our credit criteria and marketing strategies.

• Thinking about competitive pressures, have there been any major launches or promotions from competitors in the past quarter that might be drawing potential applicants away?

Why it matters: Competitive actions could be directly impacting our application volumes. Expected answer: A few new competitive offers in the market. Impact on approach: If significant competitor activity is confirmed, we'd need to reassess our product positioning and value proposition.

• Reflecting on internal changes, have there been any modifications to the application process, credit requirements, or card benefits in the past six months?

Why it matters: Internal changes could be creating friction or reducing the attractiveness of our offerings. Expected answer: Minor updates to the online application process. Impact on approach: If significant changes are identified, we'd need to evaluate their impact on the user experience and value proposition.