Why has the number of new loan applications for OakNorth's small business lending product dropped by 30% this quarter?

Introduction

The 30% drop in new loan applications for OakNorth's small business lending product this quarter is a significant issue that requires immediate attention. To address this problem, I'll employ a systematic approach to identify, validate, and resolve the root cause while considering both short-term and long-term implications for the product and business.

Step 1

Clarifying Questions (3 minutes)

• Considering the timing, I'm wondering if there have been any recent changes to the loan application process. Have we implemented any new features or requirements in the past quarter?

Why it matters: Recent changes could directly impact application volume. Expected answer: Yes, we updated the credit check process. Impact on approach: If confirmed, we'd focus on analyzing the new process's impact.

• Looking at market conditions, has there been a shift in small business lending demand overall? Are our competitors experiencing similar declines?

Why it matters: External factors could be driving the decrease. Expected answer: Overall market demand has remained stable. Impact on approach: If true, we'd focus more on internal factors and competitive positioning.

• Regarding our target audience, have we noticed any changes in the types of businesses applying for loans? Is the drop consistent across all segments?

Why it matters: Helps identify if the issue is global or segment-specific. Expected answer: The decline is more pronounced in the retail sector. Impact on approach: We'd investigate factors specifically affecting retail businesses.

• Considering our marketing efforts, have there been any significant changes in our outreach or advertising strategies this quarter?

Why it matters: Changes in marketing could directly impact application volume. Expected answer: Marketing budget was reduced by 20% this quarter. Impact on approach: We'd analyze the correlation between marketing spend and application volume.