Sensing the system

Young adults (18 to 25 years old) in Switzerland are a high-risk group for indebtedness. According to the Federal Office of Justice, “80% of indebted made their debt before the age of 25” and 38% of all young adults in German-speaking Switzerland have outstanding monetary obligations [1].

Digitalization has changed the way we live – also regarding personal financial behaviour and management. Especially Generation Z (born 1997-2010), as digital consumers, are exposed to online banking, e-commerce, and digital payment models. However, there is a research gap, on whether there is a potential link between digitalization and indebtedness of young adults. Therefore, the aim of my thesis was in a first step to find out whether and how digitalization, more specifically online shopping and digital payment methods, are correlated with indebtedness of young adults in Switzerland.

Strategy

The process of my project began with a literature review. After primary research (interviews with experts from debt counselling and prevention, ethnographic toolkits and an online survey with indebted young adults) it became evident that digitalization is just an amplifier of the issue of indebtedness but the roots of the problem lie in a lack of individual skills. Namely, young indebted lack the ability to wait, the ability to resist and buy less of what is not really needed, the ability to divide money, and the ability to have an overview of their own finances.
Furthermore, it became apparent that parents influence the financial and consumption behaviour of their children and are most often lenders.

Emergence

Based on these findings, an intervention, more concrete a concept of a toolbox in the form of an app, was designed and tested. The app Financidence addresses parents (co-user) and their «child» (user from the age of 16). Through different tools, young adults can train essential financial and consumption skills and can change their behaviour in order to prevent and contain debt.

[1] Massnahmen gegen die steigende Jugendverschuldung. (n.d.). www.parlament.ch. Retrieved February 24, 2022, from https://www.parlament.ch/de/ratsbetrieb/suche-curia-vista/geschaeft?AffairId=20104106

System Map

Flow of Indeptedness