This extraordinary and challenging year is drawing to a close, and many people are looking forward to a new chapter with the coming year 2021.
There is hope that a certain degree of normalcy in our lives can be regained in the new year. However, for the time being, we will unfortunately face the same challenges. The year 2020 will undoubtedly go down in history as a very challenging year for humanity. For the sake of our health, our society, and the economy, we hope that the following decade will develop more positively.
The most important news from Cashare's perspective is that the entire team is in excellent health, and thankfully, there have been no serious or tragic cases among our immediate circle. However, COVID-19 did cause some turbulence for us as well, significantly impacting our business performance and the year as a whole. This is reason enough to take a closer look at this turbulent year.
New office space
To accommodate the company's growth and the associated increase in staff, we decided at the end of 2019 to take over the vacant neighboring offices, doubling our office space from approximately 210 m² to 420 m². Minor construction work to connect the offices was carried out in February 2020. This required some temporary flexibility for employees regarding their workspaces, but the team's enthusiasm easily overcame these circumstances.
But while the final painting and electrical work was being completed, we sent the entire team to work from home due to the coronavirus. As a result, the offices were never fully occupied by the whole team. After the lockdown, some of the offices were occupied, but due to the coronavirus measures, this was still very limited, with many people continuing to work from home. On the one hand, this was regrettable, but on the other hand, the expansion over the past few months allowed us to comfortably comply with the coronavirus measures and avoid putting anyone at risk. In general, the entire team acted very responsibly and exemplarily, adapting to the new and unfamiliar rules of conduct and continuing to deliver work at a high level and with our usual top quality. Nevertheless, we will definitely hold the official opening of the new offices as soon as it is safe to gather together again.
Responses to COVID-19 and working from home
One of the buzzwords during the Corona period was certainly "home office," even though it wasn't chosen as the word of the year 2020 (the word of the year was Systemically importantAs described above, we sent the Cashare team to work from home very early on, even before the lockdown and the Federal Council's appeal. In general, we took the crisis very seriously from the outset and viewed it as a risk for the entire SME sector. As soon as the first news from Northern Italy reached us, a multi-stage contingency plan was developed and implemented. The first stage took effect immediately, and every employee, for example, took their laptop home in the evening to be able to continue working in the event of a curfew. The final stage was then activated by the shutdown, and the entire team worked from home without restrictions. Our DNA as a technology company and our more than 12 years of experience proved invaluable here. Thanks to the preparations made in the preceding stages, Cashare's entire operations could be relocated to remote work in a very short time. Our IT infrastructure was ideally prepared, and all employees were familiar with its use. Customers could reach us without interruption via the various online contact options and the virtual telephone system. Only physical mail had to be processed on-site by one person each day. We are genuinely proud of this smooth transition in such an exceptional year. It confirms that the changeover was possible without any loss of productivity, while maintaining the same high quality thanks to technology, but above all thanks to our professional and motivated employees.
However, the coronavirus not only impacted how we work, but also, and perhaps more importantly, the risk assessment process for loan applications. During regular risk steering meetings, the various risks are continuously reviewed, and the parameters are adjusted as needed within the review process. Due to the pandemic, additional extraordinary risk meetings were held (depending on current events), and developments were closely monitored. For example, the risk parameters for personal loans, SME loans, and collateral were continuously reviewed. At the same time, immediate measures were developed to provide support to affected SME borrowers during this difficult and uncertain period. The instrument of payment deferral was developed and implemented to alleviate the liquidity pressure on borrowers during this challenging time. Fortunately, this instrument only had to be used about a dozen times, but in those cases, it provided lasting help to companies during the crisis.
We also observed a significant increase in activity on the newly introduced secondary market, particularly at the beginning of the shutdown. The need for, and the functioning of, this market were rigorously tested and confirmed by the situation. Especially in times of uncertainty, some investors feel the need to divest themselves of investments because they require the liquidity elsewhere or prefer to have cash readily available. On the other hand, many investors were able to profit from this by securing attractive loan tranches. It was encouraging to see that the market functions and that buyers can be found when prices are attractive.
Project "A Heart for SMEs" as a result of Corona
However, it was important to us not only to offer support through existing loan products and new instruments like payment deferrals. Within just a few weeks, our project went from zero to 100 A heart for SMEs Built from scratch, with the same domain name, this solution allowed us to leverage our expertise in payment processing in the form of a newly established voucher system. The vouchers were designed to enable SMEs to continue generating liquidity despite store closures during the lockdown. Cashare offered the system and all related processing free of charge as our contribution to the community during this challenging time. For SMEs with catching up to do digitally, in particular, this offering provided an opportunity to quickly access an additional sales channel thanks to digital technology. The solidarity shown by voucher purchasers was also gratifyingly evident. A few months after the lockdown was lifted and businesses were able to reopen normally, we entrusted the project to the responsible hands of [name of responsible entity]. Hamster Handed over, with various advantages for our SMEs. This project by Keen Innovation AG, a subsidiary of Bank Cler, offers SMEs easy access to an online shop with interesting functionalities and can be used today.
System further developments
But we haven't just created a completely new (voucher) system from scratch; we've also continuously developed our existing systems. As mentioned above, we've introduced the option of deferring payments on installment loans. We've also incorporated and implemented many of our customers' suggestions and requests regarding the secondary market. Furthermore, we've introduced new forms of security, such as guarantees from educational institutions for student loans, which have proven very popular with investors. We've also focused on developing our APIs so that we can implement future customer requests even more flexibly and quickly, and offer direct connections to our system. In general, we're constantly working to keep our system up-to-date with the best availability and security, and to support the strong growth in the volume of loans brokered.
Developments in 2020
To manage future growth, we will be welcoming two new employees on January 1, 2021, and two more will join us on February 1. This means that for the first time in 2021, Cashare will have more than 20 employees, supporting our mission for a fair and efficient credit market in Switzerland. What began in 2008 with just two people has developed into a consistently innovative and reputable financial services provider, offering a high degree of stability and considered a pioneer in the rapidly growing fintech sector in Switzerland. Our strong team is committed to ensuring that Cashare continues its healthy growth and evolves in line with our customers' needs.
Unfortunately, several exciting projects fell by the wayside in 2020. In particular, we were unable to implement strong partnerships with SMEs as planned. As recently as January, we were anticipating strong growth. However, the lockdown, and especially the crucial support provided by the federal government's emergency loans, caused demand for SME loans to virtually collapse. Our primary concern, however, was ensuring that the economy received assistance as quickly and easily as possible. Our only disappointment was that we (and the fintech sector in general) were not included in the federal government's emergency program. We are convinced that our efficient technologies for risk assessment, processing, and other processes could have made a substantial contribution, perhaps even outperforming traditional banks, given our digital DNA. We see this as a missed opportunity by the Federal Council to utilize the technological and innovative developments originating in Switzerland. Ultimately, however, we shouldn't complain and should remain humble, especially considering the significant challenges faced by other businesses. Ultimately, even in this challenging year, we were able to achieve comfortable growth with a high double-digit percentage. More importantly, however, this growth is sustainable and achieved through consistently rigorous risk assessment processes. The COVID-19 pandemic year, in particular, has demonstrated the importance of sustainable auditing practices and underscores the ineffectiveness of a growth strategy at any cost. Throughout our long history, we have always prioritized quality and sustainability over quick profits. This stability is certainly one of our defining characteristics, and one we have consistently proven. This stability is reflected not only in our top-performing team but also in our strong and highly knowledgeable Advisory Board, which, like the team itself, is characterized by its continuity. Therefore, we were delighted when Harald Schnabel was able to return to the board after having to step down as CEO of BX Swiss due to potential conflicts of interest. We have also been pleased to see several former interns choose to continue working for Cashare. This is the best testament to the positive work environment and the meaningful work we offer in an attractive setting.
Outlook for the new year
We are looking forward to 2021 and, like most people, naturally hope that we can soon put the coronavirus behind us and return to normality. However, we are also convinced that people, and we as a company, have learned a great deal during this time. This will strengthen us for the future and hopefully encourage us to be more sustainable and considerate towards our planet and our fellow human beings. Ultimately, we have also seen what can restrict us and how much we miss being close to other people. This applies not only to family and friends, but also to colleagues. We missed not only team dinners, the Christmas party, or the opening celebration of our new offices, but also the interaction with colleagues we have grown to value. We will also take with us the newfound strength of having successfully navigated an unexpected and highly challenging time together and of having used our skills to help others. We have exciting projects and new products that we will be rolling out continuously in the new year, and we are very much looking forward to them.
We wish you a happy and healthy New Year, hopefully soon free of the coronavirus. We sincerely thank all our customers, partners, shareholders, advisory board members, friends, and acquaintances for their continued support and valuable feedback. You are the best crowd!
Heartfelt,
Michael Borter and the entire Cashare team!
