MAS Increases Penalty Imposed On DBS After Latest Service Disruption, Orders Review Of Incident

Repeated Inconvenience To The Public Due To DBS Service Disruption Is Unacceptable: MAS

On Friday (5 May), DBS Bank users again encountered issues assessing their digital banking and mobile services.

This came just about a month after a similar outage on 29 Mar.

DBS Digital Services Down A Second Time In 2 Months, Back To Normal After 45 Minutes

The Monetary Authority of Singapore (MAS) has responded by increasing the penalty imposed on the bank for a previous service disruption in 2021.

They also instructed the bank to expand a review to include the latest incident.

DBS service disruption unacceptable: MAS

In a media release on Friday (5 May), MAS Deputy Managing Director (Financial Supervision) Ho Hern Shin said DBS has “fallen short of MAS’ expectations for banks to deliver reliable services to their customers”.

She added that the repeated inconvenience caused to the public is “unacceptable”.

Source: Google Maps

Urging the bank to “spare no effort” to deal with the “underlying issues” that led to the disruptions, she noted that,

The additional capital requirement imposed at this time underscores the seriousness with which MAS treats this matter.

DBS additional capital requirement increased

The additional capital requirement Ms Ho was talking about involves DBS applying a multiplier of 1.8 times to its risk-weighted assets for operational risk.

Banks have to set aside a sum of capital as a buffer to cover unexpected losses, which will also help them stay solvent during crises.

A 1.5 multiplier was imposed by MAS in February 2022 after a DBS service disruption in November 2021.

That meant the bank had to set aside about S$930 million in regulatory capital.

Source: DBS Bank on Twitter

With the further additional capital requirement on the bank imposed on Friday (5 May), their total additional regulatory capital will be about S$1.6 billion.

MAS, which is Singapore’s financial regulatory authority, said they may modify the size of the multiplier depending on the outcome of ongoing reviews.

DBS committee must review both March & May incidents

After DBS experienced a service disruption on 29 Mar, DBS set up a Special Board Committee to review the incident.

DBS Digital Services Currently Down, Bank Assures Customers Systems Remain Secure

MAS has directed this committee to also review the latest incident on 5 May.

This is despite the fact that the causes of both incidents appear to be “distinct from each other”, MAS said.

The authority also told the bank to minimise service disruptions to customers, saying,

MAS has also required DBS Bank to take immediate steps to improve the resiliency and recoverability of its existing system, including enhanced monitoring, more comprehensive testing and additional system redundancies.

DBS CEO apologises for service disruption

Responding to MAS’ announcement, DBS CEO Piyush Gupta apologised for the recent disruptions.

In a statement sent to MS News, he said the bank is “committed to doing better” as their customers “rightly expect more” of them.

The review by the Special Board Committee will look into DBS’ technology resiliency with an independent external expert.

This review will be completed “as a matter of utmost priority”, he added. All recommendations will be implemented “expeditiously”.

As for the further additional capital requirement imposed by MAS, it’ll have an incremental 0.3% point impact on DBS Group’s 31 Mar Common Equity Tier 1 capital ratio, Mr Gupta noted.

That will reduce it from 14.4% to 14.1%.

3 service disruptions in 18 months

The disruption on 5 May was the third one in 18 months.

Though DBS said it lasted about 45 minutes, customers reportedly couldn’t log into their online and mobile services for about an hour from about 12.30pm.

Even physical ATMs were said to be down as well.

DBS later shared that the disruption was caused by a systems issue unrelated to the incident on 29 Mar, which caused service to be down for as long as 12 hours.

After the March disruption, Mr Gupta said during an annual general meeting that it “embarrasses” them, reported The Straits Times (ST).

In November 2021, DBS’ digital banking services were unavailable for at least two days — the bank’s worst outage in a decade.

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