On the morning of 29 March 2023, customers of DBS Bank who tried to log in to online banking found they could not. The lock-out ran from about 8.30am to 5.30pm. Five weeks later, on Friday 5 May, DBS’s digital banking and ATM services stumbled again, this time for about 45 minutes. The regulator responded to both.
The Monetary Authority of Singapore announced the same night that it was raising the additional capital DBS must hold against operational risk. The multiplier applied to the bank’s risk-weighted assets rises to 1.8 times, from the 1.5 times set in February 2022 after an earlier outage in November 2021. Added to the 2022 requirement, MAS put the total at approximately S$1.6 billion in extra regulatory capital. The Straits Times worked out that the new step alone means roughly $670 million more set aside, on top of about $930 million from 2022.
Third failure in 18 months
The Straits Times counted the 5 May disruption as the bank’s third in 18 months, and the March one as its second serious digital failure in 16 months. The November 2021 episode, which disrupted online banking and PayNow access on 23 and 24 November, had been described at the time as the worst since 2010. MAS said then that it would consider supervisory action.
This time the regulator did not hold back on language. Ho Hern Shin, MAS deputy managing director for financial supervision, said DBS “has fallen short of MAS’ expectations for banks to deliver reliable services to their customers”. She called the repeated inconvenience to the public “unacceptable” and added that “DBS Bank must spare no effort in dealing with the underlying issues leading to these disruptions.”
Reviews and fixes
After the March incident, DBS formed a special board committee on 31 March to oversee a full review of its IT resiliency, carried out by an independent outside expert. MAS had also told the bank to examine management oversight, staff competencies, operational processes, system resiliency and the architecture of its digital banking. Although the March and May failures appear to have separate causes, MAS said the review must now cover both.
The regulator also ordered immediate work on resilience and recovery: tighter monitoring, more thorough testing and extra system redundancies. It left the door open to change the multiplier once the reviews report back.
DBS chief executive Piyush Gupta apologised late on the Friday night and said the bank was committed to doing better. “We will complete the review as a matter of utmost priority and implement all recommendations expeditiously,” he said.
Sources
- MAS Imposes Further Additional Capital Requirement on DBS Bank for Disruption of Banking Services
- MAS orders DBS to set aside regulatory capital of $1.6b after latest disruption – The Straits Times
- DBS faces supervisory action after worst online outage – The Asian Banker
