Should Kuda Bank prioritize expanding our loan offerings to increase revenue or focus on improving savings features to boost user retention?

Introduction

The trade-off between expanding loan offerings and improving savings features at Kuda Bank presents a critical strategic decision. This scenario involves balancing revenue growth against user retention, two fundamental pillars of our business. I'll analyze this trade-off by examining the product ecosystem, potential impacts, and key metrics, then design an experiment to inform our decision-making process.

Step 1

Clarifying Questions (3 minutes)

• Context: I'm assuming Kuda Bank is a digital-first bank targeting young professionals. Could you confirm our primary user demographic and their most pressing financial needs?

Why it matters: Helps tailor our solution to user needs Expected answer: 25-40 year old urban professionals focused on wealth building Impact: Would influence which feature set to prioritize

• Business Context: Based on our current revenue mix, I'm thinking loans might be a smaller portion compared to other services. What's the current revenue split between loans, savings, and other products?

Why it matters: Helps assess potential revenue impact of expanding loans Expected answer: Loans contribute 20% of revenue, savings 40%, other services 40% Impact: Higher loan revenue would justify prioritizing loan expansion

• User Impact: Considering user behavior, I'm curious about engagement levels with our savings features. What's our current user retention rate, and how does it correlate with savings feature usage?

Why it matters: Indicates potential retention boost from improving savings Expected answer: 70% retention rate, strong correlation with savings usage Impact: Strong correlation would support focusing on savings improvements

• Technical: Given the complexity of loan systems, I'm wondering about our current technical capabilities. How scalable is our existing loan infrastructure?

Why it matters: Affects feasibility and timeline of loan expansion Expected answer: Moderate scalability, would require significant investment Impact: Limited scalability might favor prioritizing savings features

• Resource: Thinking about team capacity, I'm curious about our current resource allocation. How are our product and engineering teams currently split between loans and savings projects?

Why it matters: Indicates potential for quick wins in either area Expected answer: 30% loans, 50% savings, 20% other Impact: Higher allocation to savings might suggest easier improvements there