Interview with the Crowd4Cash founder

Crowd4Cash has reached another important milestone with over 200 funded loans. We use this as an opportunity to conduct an interview with the person who symbolizes the success of the Crowd4Cash

Interviewer: Roger, first of all congratulations on this milestone. Peer-to-peer loans (Crowdlending) in Switzerland are growing up: how do you rate the competitive situation in Switzerland?
Roger Bossard: We hardly feel the competition. The Swiss market has sufficient potential for all existing platforms (note from the interviewer: total CHF 15.5 billion in private loans and leasing and CHF 300 billion in SME loans). We are also very confident for the future. It helps us that we have the cost management extremely well under control. We are also convinced that we are doing a lot better than our competitors. This is reflected, among other things, in the very low default rate of less than 0.2%.

What is your assessment of the future development in the Swiss Crowdlending market?
I firmly believe that the Swiss peer-to-peer credit market is only at the beginning of its development. In contrast to other markets, our market has so far been characterized by a certain inefficiency, which has favored high margins at the expense of borrowers. On the investor side, the investment crisis is becoming more and more precarious, as returns in the fixed-income environment tend towards zero or even negative. I could hardly believe that there are even bank products with a predefined negative return, which allows the institutional clients to optimize the negative interest rates. Specifically, this means that the investor invests his money, in the knowledge that he will get less in the end. For us, it is only a matter of time until these customers discover the benefits of a Swiss Crowdlending product. For example, we are targeting net yields of up to 5% in our Qualified Investors products above Libor (or now Saron).

How do you describe the development so far with Crowd4Cash?
We are already one of the older platforms on the market as early movers and established ourselves as the clear number four in Switzerland in consumer credit. Right from the beginning, we chose the tactic to develop our services internally. Although this has put us behind schedule, we can now benefit from major cost and efficiency advantages. Our own platform also enables us to develop and integrate new products and system improvements at an exciting speed. At times we have weekly IT releases. Many banks have IT releases on a quarterly basis. We were also able to develop some unique products, which give us a unique selling proposition in the Swiss market.

What were the previous stumbling blocks?
We were faced with the classic chicken egg problem. We had good demand for credit from the beginning. Ideally, these loans would have been covered from the beginning with a mix of private and institutional investors. With this mix, even larger loans can be covered quickly, which is essential for the growth and the history of the platform. The reality for us was somewhat different: On the borrower side, we have massively lost volume due to lack of funding. Nevertheless, over the past two years we have built up a great and loyal investor community, many of which have been involved since the beginning. I would like to take this opportunity to thank our customers for their loyalty. So far, they have benefited from very attractive interest rates and low default rates. Institutional investors are generally more cautious on account of their investment rules as they already require a track record and a certain size. Building this track record is the real challenge for the young peer-to-peer platforms. We are convinced that we have overcome this threshold, as we note a heightened interest from institutional clients. From this side, we hope for a further massive growth in the future.

What are the strengths of Crowd4Cash? What do you see as a weakness?
Crowd4Cash is more flexible than most Crowdlending providers in the market. On average, we need less than two months for a completely new product (design, legal requirements, process definitions and implementation). Even larger IT adaptations are developed and implemented within a very short time thanks to the well-coordinated team. We are thus able to bring innovations to market very quickly. Our products are competitive and our default rates of less than 0.2% are clearly lower than the market average. All this makes us a reliable and innovative partner for our customers.
Unfortunately, the weaknesses are currently still on the funding side of the projects and our as well as the general awareness of Crowdlending in Switzerland. We have achieved a lot in the last two and a half years. Nevertheless, we could massively handle more volumes. It is particularly painful to lose loan projects due to lack of funding. The relatively high cost of customer acquisition and initial customer service will not be rewarded.

Another personal question: Why are you as the founder no longer CEO but CFO / COO?
With Andreas Oehninger, we have gained a very experienced partner as CEO, who was previously CEO of a service provider for asset managers, family offices and other institutional clients. Thus, he knows the needs of this customer group from his own experience. It was easy for me to focus on the other important financial and organizational issues and provide added value.

What's next for Crowd4Cash?
We regularly receive feedback from our customers about which we are always happy. Of course, we try to implement the raised points whenever possible. In addition, we continue to plan optimizations on the system side or the platform. In the coming weeks, we will once again focus more on optimizations for the investor. There we still see a lot of potential, for example to make the systems even easier and clearer than today. We still have many good ideas in our pipeline and plan to continue to implement them. On the business side, we want to maintain growth, which is well above the market average. We are extremely confident that we will continue to succeed.

Interviewer: Thank you Roger for this interesting insight. I think I speak for all of us when I say that we are looking forward to more great news from Crowd4Cash today. Good luck to you and the team!