For Kearny Bank's home mortgage products, should we focus on offering more competitive rates or providing faster approval processes to potential homebuyers?

Introduction

For Kearny Bank's home mortgage products, we're facing a critical trade-off between offering more competitive rates and providing faster approval processes to potential homebuyers. This decision will significantly impact our market position, customer acquisition, and overall business performance. I'll analyze this trade-off by examining the product context, identifying key metrics, designing experiments, and providing a data-driven recommendation.

Step 1

Clarifying Questions (3 minutes)

• Based on the competitive landscape, I'm thinking our current market position might be influencing this decision. Could you provide some context on our current market share and how we compare to our main competitors in terms of rates and approval times?

Why it matters: Helps understand the urgency and potential impact of the trade-off Expected answer: We're a mid-sized player with room for growth Impact on approach: Would influence whether we prioritize aggressive rate competition or differentiation through speed

• Considering our business model, I'm assuming mortgage products are a significant revenue driver. Can you confirm the percentage of our overall revenue that comes from mortgages, and how that's trended over the past year?

Why it matters: Determines the strategic importance of this decision Expected answer: Mortgages contribute 40-50% of revenue, with slight growth Impact on approach: Higher percentage would justify more resources for implementation

• Looking at user behavior, I'm curious about our current customer acquisition funnel. What percentage of potential homebuyers drop off during the application process, and at which stages?

Why it matters: Identifies pain points in the current process Expected answer: 30-40% drop-off, mainly during document submission and approval waiting periods Impact on approach: High drop-off during waiting periods would support faster approval focus

• From a technical perspective, I'm wondering about our current approval process infrastructure. How automated is our current system, and what's the potential for further automation or AI integration?

Why it matters: Assesses feasibility of improving approval speed Expected answer: Partially automated, with room for improvement Impact on approach: High automation potential would support focusing on faster approvals

• Considering resource allocation, what's our current capacity for implementing changes to our rate structure or approval process? Are there any ongoing initiatives that might compete for resources?

Why it matters: Determines practical constraints on implementation Expected answer: Limited resources, with one major tech project ongoing Impact on approach: Resource constraints might favor a phased approach