Why has Zeta's credit card application approval rate dropped by 15% over the past month?

Introduction

The recent 15% drop in Zeta's credit card application approval rate over the past month is a critical issue that demands immediate attention. This decline not only impacts our revenue but also affects customer satisfaction and our competitive position in the market. I'll approach this problem systematically, focusing on identifying the root cause, validating hypotheses, and developing both short-term and long-term solutions.

Step 1

Clarifying Questions (3 minutes)

• Looking at the timing, I'm thinking there might have been a recent change in our credit scoring model. Has there been any update to our risk assessment algorithms in the past 1-2 months?

Why it matters: Changes in credit scoring can directly impact approval rates. Expected answer: Yes, there was a recent update. Impact on approach: If confirmed, we'd focus on validating the new model's performance.

• Considering potential data issues, have we noticed any anomalies in the data feeds from credit bureaus or other third-party data providers?

Why it matters: Inaccurate or incomplete data can lead to incorrect credit decisions. Expected answer: No significant issues reported. Impact on approach: If issues are found, we'd prioritize data quality checks and provider communication.

• Given the current economic climate, I'm curious about changes in applicant demographics. Have we seen any shift in the profile of applicants over the past month?

Why it matters: Economic factors can change who's applying, affecting overall approval rates. Expected answer: Some changes in applicant profiles noted. Impact on approach: We'd segment the data to understand if certain groups are disproportionately affected.

• Thinking about our marketing efforts, have there been any significant changes in our acquisition channels or promotional strategies recently?

Why it matters: Different channels can attract varying quality of applicants. Expected answer: New partnership launched last month. Impact on approach: We'd analyze approval rates by acquisition channel to identify any correlations.