Why has Fundbox's invoice financing approval rate dropped by 15% over the past month?

Introduction

Fundbox's invoice financing approval rate dropping by 15% over the past month is a critical issue that demands immediate attention. This significant decline could impact the company's revenue, customer satisfaction, and market position. I'll approach this problem systematically, focusing on identifying the root cause, validating hypotheses, and developing both short-term and long-term solutions.

Step 1

Clarifying Questions (3 minutes)

• Looking at the timing, I'm thinking there might be a recent change in our approval criteria. Has there been any update to our risk assessment model in the last 1-2 months?

Why it matters: Changes in risk models can significantly impact approval rates. Expected answer: Yes, there was a recent update. Impact on approach: If confirmed, we'd focus on analyzing the new model's performance.

• Considering potential market shifts, have we seen any changes in the types of businesses applying for invoice financing recently?

Why it matters: Changes in applicant demographics could affect approval rates. Expected answer: There's been an increase in applications from higher-risk industries. Impact on approach: We'd need to assess if our model is appropriately calibrated for these new applicants.

• I'm curious about our data integrity. Have there been any recent changes to our data collection or processing methods that might affect how we calculate the approval rate?

Why it matters: Ensures we're comparing apples to apples when looking at historical data. Expected answer: No significant changes in data processes. Impact on approach: If changes are identified, we'd need to adjust our analysis accordingly.

• Thinking about external factors, have there been any notable economic events or policy changes in the past month that could impact small businesses' creditworthiness?

Why it matters: External factors can significantly influence approval rates. Expected answer: There's been some economic volatility, but no major policy changes. Impact on approach: We'd need to factor in economic conditions when assessing our model's performance.