this is what we call “ universal banking ”, a regime in which banks operate like financial supermarkets. naturally, banks like the universal banking regime as it offers non - interest income such as fees and commission as well as diversification of businesses. at the same time, customers also like universal banking as it offers great convenience in the form of a one - stop service instead of having to go through different firms for different types of financial transactions or products. there is a big difference though between a bank and a supermarket – you don ’ t entrust a supermarket with your hard - earned money or life savings ; and if you are enticed by a supermarket promotion to buy something you don ’ t need, the loss is unlikely to be huge but this may not be case for investment or insurance products. you could lose your shirt. therefore bank customers require protection not only on the safety of their deposits, but also in the way that they are treated as consumers and as investors. in terms of protecting the safety of customers ’ deposits, the hkma seeks to maintain prudential soundness of individual banks. we do this through the regulation and supervision of banks and, in the unfortunate event of a bank failure, through the activation of the deposit protection scheme to safeguard customers ’ deposits up to half a million hong kong dollars per depositor. in bis central bankers ’ speeches today ’ s speech, i propose to focus not on prudential supervision but on the protection of bank customers as consumers and investors. how do we protect bank customers? so the next question is : how do we protect bank customers as consumers and investors? the answer is the very same principle : “ treat your customers fairly ”. now let me elaborate on how this can be achieved. first of all, when selling a banking product, such as a loan or a credit card the bank must ensure that the key terms and conditions are fair and equitable. the bank should also ensure that the key terms and conditions are clearly spelt out and understood by the customer. for example, when a customer wants to take out a loan, the bank should highlight the key features about interest rates and any applicable fees, charges or penalty for late or early repayments. when it comes to the selling of investment products, the situation becomes more complicated. the complication arises not only from the risk inherent in the investment products, some of which can be rather complex, but also from the special relationship between banks and their customers. banks serve a special function in

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. to help you better understand the various methods, we will have a brief demonstration to illustrate these methods towards the end of the press conference. a series of promotional activities will be launched by the banking industry and individual banks from june 2005 onward to help customers to fully understand this security measure. mr he will highlight the key features of the consumer education programme to you. two - factor authentication strengthens the security controls of internet banking and protects bank customers from internet banking frauds. we are confident that with the joint efforts of the banking sector, bank customers, the police and the hkma, internet banking will continue to flourish under a safe and sound environment in hong kong.