Why has Lending Club's personal loan origination volume dropped by 30% in the past quarter?

Introduction

The recent 30% drop in Lending Club's personal loan origination volume is a significant concern that requires immediate attention and a thorough root cause analysis. As we delve into this issue, we'll systematically examine potential factors, gather relevant data, and develop actionable solutions to address the decline and prevent future occurrences.

Step 1

Clarifying Questions (3 minutes)

• Looking at the timing, I'm thinking there might be seasonal factors at play. Has this drop occurred during a specific time of year that might typically see lower loan demand?

Why it matters: Seasonal trends could explain the volume decrease and inform our solution approach. Expected answer: The drop is not aligned with typical seasonal patterns. Impact on approach: If seasonal, we'd focus on strategies to mitigate seasonal fluctuations.

• Considering recent economic shifts, I'm wondering if there have been any significant changes in interest rates or lending policies that could affect loan applications. Have there been any notable policy changes in the past quarter?

Why it matters: Policy changes could directly impact loan origination volume. Expected answer: There have been some minor policy adjustments, but nothing major. Impact on approach: If policy-related, we'd need to reassess our lending criteria and market positioning.

• Given the competitive landscape, I'm curious if there have been any new entrants or aggressive moves by competitors in the personal loan space. Have we seen any significant shifts in market share among our competitors?

Why it matters: Competitive pressure could be drawing potential borrowers away from Lending Club. Expected answer: There's been some increased competition, but no major market disruptions. Impact on approach: If competition-driven, we'd need to focus on differentiating our offering and improving our value proposition.

• Thinking about our user experience, I'm wondering if there have been any recent changes to our application process or website that might be impacting conversion rates. Have we implemented any significant updates to our platform in the last quarter?

Why it matters: Technical issues or UX changes could be creating friction in the loan application process. Expected answer: There have been some minor updates, but no major overhauls. Impact on approach: If UX-related, we'd need to conduct usability testing and optimize our conversion funnel.