These trends show that the propensity to save and retain the funds in the banking system remains high. Household savings are growing dynamically, within the historical trends. However, the unique character of the crisis has implications on its structure. Given the unpredictability, the propensity for long-term savings is decreasing, while the share of these deposits in the total household deposits from April last year until now reduced by five percentage points. On the other hand, in the corporate sector, the growth rates are significantly above the historical average, with restraint from investment activity and growth of assets. The past crisis episodes were characterized by a reduction in corporate deposits, which shows that the corona-crisis prompts different behavior. The pandemic increases the propensity to hold liquidity and save, in conditions of pronounced and prolonged unpredictability. Besides the growth of savings in banks, in conditions of a pandemic, there is an increasing propensity of households to invest in real estate. Actually, in conditions of low interest rates, relatively stable disposable income, reduced possibilities and needs for consumption, change in the models of work, globally there is an increase in the demand for real estate and in the real estate prices. Unlike most economic indicators, which collapsed during the pandemic, real estate prices are increasing. In the EU countries, in the first half of this year, real estate prices registered an average growth of nearly 7%, compared with the growth of around 4% in the past few years.

The HKMA endorsed this consensus and issued a circular in June 2004 requesting banks to implement such security measure by June 2005 for high-risk retail Internet banking transactions (such as fund transfers to non-designated accounts). Two-factor authentication is a security measure recognised by the information security industry to combat Internet banking frauds. In addition to the normal login ID and password, a customer needs a second factor which is in his or her physical possession for additional identity verification. This second factor should be difficult to be stolen together with the customer’s login ID and password by fraudsters over the Internet. We believe that this is an effective way in tackling the latest Internet banking frauds such as fake bank websites, phishing e-mails and Trojan software. We understand that a number of banking supervisors in other financial markets are currently reviewing the implication of the latest Internet banking frauds and consulting their banks in relation to the adoption of two-factor authentication for Internet banking. Hong Kong is one of the first places to offer such security measure to bank customers. So far the implementation of two-factor authentication has been progressing satisfactorily. All banks offering high-risk retail Internet banking transactions will allow customers to apply for two-factor authentication from next month. Individual banks may offer different two-factor authentication methods to customers. Three common methods being adopted by banks in Hong Kong are digital certificate, security token-based one-time password and SMS-based one-time password.