For Stori's savings feature, should we emphasize higher interest rates to attract deposits or lower rates to improve long-term sustainability?

Introduction

The trade-off we're examining for Stori's savings feature is whether to emphasize higher interest rates to attract deposits or lower rates to improve long-term sustainability. This decision impacts user acquisition, retention, and the company's financial health. I'll analyze this trade-off by considering user behavior, market dynamics, and long-term business strategy.

Step 1

Clarifying Questions (3 minutes)

• Based on the competitive landscape, I'm thinking Stori might be facing pressure from traditional banks. Could you share insights on our current market position and main competitors?

Why it matters: Helps understand the urgency and context of the decision Expected answer: Stori is a challenger bank with growing market share but facing competition from both traditional banks and other fintech players Impact on approach: Would influence how aggressive we need to be with our interest rates

• Considering user segments, I'm assuming we have a mix of new and existing customers. Can you provide a breakdown of our user base and their typical savings behaviors?

Why it matters: Allows us to tailor our approach to different user segments Expected answer: 60% new users, 40% existing, with varying savings habits across segments Impact on approach: Would help determine if we need different strategies for acquisition vs. retention

• Looking at our financial model, I'm curious about the relationship between deposit volume and profitability. How sensitive is our business model to changes in interest rates?

Why it matters: Helps assess the long-term impact of our decision on sustainability Expected answer: Moderate sensitivity, with a 1% change in rates impacting profitability by X% Impact on approach: Would influence how much we can adjust rates without compromising sustainability

• Regarding our tech infrastructure, I'm wondering about our ability to implement dynamic interest rates. How flexible is our current system in terms of rate adjustments?

Why it matters: Determines the feasibility of more nuanced strategies Expected answer: System can handle weekly rate adjustments with some development work Impact on approach: Could open up possibilities for more sophisticated, data-driven rate strategies

• Considering our product roadmap, how does this savings feature fit into our broader strategy for the next 12-18 months?

Why it matters: Ensures alignment with overall product vision and resource allocation Expected answer: Savings is a key pillar in our strategy to become a full-service financial platform Impact on approach: Would influence how much we prioritize this feature and invest in its success