EMTH6013 Autumn 2018: Critical Evaluation of Household Debt Themes

This essay critically evaluates emerging themes related to household debt, drawing from an article analyzing its statistics and impact on the economy. Key themes explored include the role of emerging technologies like artificial intelligence in banking, societal changes influencing lifestyle and debt, and the evolving work environment with online transactions. The analysis covers the impact of these themes on individuals, lending institutions, and the economy, highlighting both positive effects like increased economic activity and potential challenges such as rising unemployment. The essay also projects the future impact of these themes over the next five years, anticipating changes in lifestyles, poverty levels, and the operational efficiency of lending institutions. It concludes by emphasizing the importance of adapting to these emerging trends for sustainable economic growth.

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Emerging themes
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Emerging themes
Task one.
The article, “Household debt: statistics and impact on the economy,” the author discusses
various issues in regard to household debt and their influence on the economy. Some of the key
factors which the article covers include emerging technologies, emerging work environment, and
changes in society especially lifestyle, among others. According to Katherine (2012, P.24),
Household debts are the money borrowed by people for their personal use. This could be
mortgages, student loans among others. Most of these companies lending money include banks
and other financial institutions.
One of the emerging themes discussed from the article is the use of technology in the
banking sector to enhance security. According to Celeste & Alla (2014, P.11), banks have been
losing a lot due to improper ways of handling loan borrowers and therefore most of them are
establishing proper means to handle the issue, like for example, introducing artificial
intelligence. In this case, machines are designed in a way in which they work the same as human
beings and can notice the person borrowing for the second time because once fingerprints have
been detected in the systems would be hard to erase them (Soengman 2015, p. 6). The article also
highlights emerging changes in society as easy accessibility for loans has made it possible for
many people to change their lifestyles. Additionally, the article also discusses the emerging work
environment which allows a banking institution to lower the workload by enabling its customers
to attain services through online transactions.
These emerging themes have various impacts on individuals, the society, the lending
institutions, and the economy. For example, emerging technologies have enabled lending

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institutions to avoid losing a lot of money to people who borrow from them twice using different
identities (Andrea 2010, p. 13). the emerging changes in the society, like for instance, the
demand for better lifestyles have made Household debt to increase, hence boosting the economy
of the country because many people are able to buy goods and services hence increasing business
revenues and profits (William & IIsung 2013, P.21). It has also made lending institutions to lend
more loans, hence assisting them to attain high profits after the payments the use of online
transactions have led to significant changes in the work environment through reducing workforce
as people know do not require to visit the banks every now and then to be given services. Better
work environment has not only benefited employees but also the banking institutions as it has
reduced the rate of employee turnover.
Task two
Emerging technology, emerging changes in the society and emerging work environment
have positive impacts on business operations and a company would be able to achieve its major
goals in a span of 5 years (Cordon 2015, p. 56). These factors will not only affect the institution,
but also its customers, the industry and competitors, the government and other stakeholders. For
example, as time goes on, all of them are likely to make customers attain more loans, unlike in
the past where most of them found it challenging due to lack of collaterals and other
requirements (Purva 2016, p. 78). In the next five years, these themes will make the government
to view banks as important institutions because as many customers continue to borrow loans,
these organizations make higher revenue and therefore contribute to enhancing the economy
(Chian-son 2014, p. 548). Generally, with a span of five years, these themes will change

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household debts, and will also make significant changes in various issues associated with the
banking industry.
From the article, the author discusses various emerging themes in the banking sector.
Most of these themes will influence not only banking institutions but also its stakeholders and
competitors. Some of these themes include emerging technologies, emerging work environment
and merging changes in society (Teresa 2016, p. 67). In emerging technologies, the article
identifies various aspects such as the use of artificial intelligence to monitor the identities of
those who borrow loans, and also identifies online transactions, like for instance, mobile banking
as some of the factors that have highly influenced the services they offer (Josim 2014, p. 89).
The author also identifies emerging changes in society by stating that various issues such as
changes in lifestyles have made household debts to increase in the recent days. Also, the author
points out that some of the emerging technologies have made significant changes in the work
environment as most of them like for instance, mobile banking have made these institutions to
realize low costs in terms of workforce because most of the services are provide online and
therefore do not require customers to have physical visit to the institutions to be given services..
In the next five years emerging changes in the society especially in regard to household
debts will make a crucial difference on lifestyles because as time goes on, people are noticing the
importance of attaining good lifestyles through borrowing loans from lending institutions and
investing wisely (Katherine 2011, p. 68). However, it may make some of the institutions to suffer
from unpaid loans especially if they fail to use proper strategies of ensuring their agreements
with borrowers are fulfilled. In the future, the level of poverty is likely to reduce as people will
use loans to startup businesses instead of fully relying on employment to get a living. Likewise,

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emerging technology will impact not only the lending institutions but also their stakeholders. For
example, the use of artificial intelligence will make banking institutions to avoid losing money in
unclear circumstances (Emmanuel & Muhammad 2016, p. 26). The emerging changes in the
workforce will also have a significant impact on lending institutions as in the next five years,
there are chances that they will incur minimal cost in salaries because as time goes on, people are
mostly relying on mobile banking and this means that in the future banks and other financial
institutions may only require few employees. However, this is likely to have a significant impact
on increasing the level of unemployment.

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References
Andrea, MB 2010, No Shelter from the Storm: Dangers from the Fair Debt Collection Practices
Act to Mortgage Industry Attorneys and a Call for Legislative Action, The Review of Litigation,
vol.29, no.2, pp. 10-15
Celeste, V & Alla, K 2014, Wealth and Credit Compliance: Does Economic Literacy Matter?
Financial Services Review, vol. 23, no. 4, pp. 10-15
Chian-son, Y 2014, Consumer Switching Behavior from Online Banking to Mobile Banking,
International Journal of Cyber Society and Education, Vol. 7, No. 1, pp. 546-567
Cordon, JT 2015, The Application of the Fair Debt Collection Practices Act to Condominium
Assessments, Southern Law Journal, vol. 25, no. 2, pp. 50-55
Emmanuel, A & Muhammad, M 2016, Asymmetric Volatility Transmission between Home
Foreclosures, Housing Prices, Unemployment Rate and Adjustable Mortgage Rates, IUP
Journal of Applied Economics, vol.15, no.1, pp. 20-27
Josim, AM, 2014, Adaptation of the Technology Acceptance Model (TAM) to the Use of
Mobile Banking Services, International Review of Management and Business Research, Vol. 3,
No. 4, pp. 87-98.
Katherine, P 2011, The Pretend Solution: An Empirical Study of Bankruptcy Outcomes, Texas
Law Review, vol. 90, no. 1, pp. 60-67

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Katherine, P 2012, The Damage of Debt, Washington and Lee Law Review, vol.69, no.2, pp. 23-
27
Purva, K, 2016, Perceived Risk and Technology Acceptance Model in Self-Service Banking: A
Study on the Nature of Mediation, South Asian Journal of Management, Vol. 23, No. 2, 2016,
pp. 78-90.
Soengman, M 2015, Decrease in the Growth of Domestic Demand in Korea, East Asian
Economic Review, vol.19, no.4, pp. 4-10
Teresa, ML 2016, Commercial Banking Transformed by Computer Technology, Monthly Labor
Review, Vol. 119, No. 8, 2016, pp. 67-98.
William, E & IIsung, N 2013, Is Student Debt Jeopardizing the Short-Term Financial Health of
U.S. Households? Federal Reserve Bank of St. Louis Review, vol. 95, no. 5, pp. 20-27