DBS CEO, previously embarrassed by disruptions in March, apologises for May outage

It was reported that service disruptions were encountered by DBS and POSB Bank customers in Singapore on Friday (5 May). Many were unable to use the digibank online and mobile services starting around 11 am. It marked the second time in two months that the bank’s digital services have faced significant outages. Also, many of its ATMs were found to be non-operational. The bank responded that its team had been notified and was working to resolve the issue. However, customers criticized DBS’ response, arguing that instead of blaming the problem on increased traffic, the bank should have explained why it had not upgraded its system to handle such increases. This incident followed a similar disruption experienced by DBS Bank customers on 29 March less than two months ago, during which they were unable to use digital banking services for over 12 hours, from 7 am to approximately 7:30 pm.

DBS CEO Gupta feels embarrassed for 29 March disruption

At the time, following the disruption on 29 March, DBS CEO Piyush Gupta said he felt embarrassed during its Annual General Meeting (AGM) which was held two days later on 31 March. “As such a well-known digital and technology bank, this embarrasses us. We are committed to doing better,” Gupta said. “Ensuring uninterrupted digital banking services 24/7 has been our key priority. Unfortunately, we fell short of it and are truly sorry.” During the AGM, DBS chairman Peter Seah also had to bow to shareholders, apologising on behalf of the bank. Calling the incident “very unfortunate” and “disappointing”, he said, “Our customers have every right to expect more of us. So, underscoring the gravity of the matter, we will be convening a special board committee with immediate effect to conduct a full and detailed investigation of the incident.” Following the disruption on Friday, Gupta apologized for the recent digital disruptions and said the bank is committed to doing better. He said that DBS Bank had convened a Special Board Committee to oversee a full review of the bank’s IT resiliency after the March incident, to be performed by an independent external expert. “We will complete the review as a matter of utmost priority and implement all recommendations expeditiously,” Gupta added.

MAS says disruptions unacceptable

With regard to the 29 March incident, the Monetary Authority of Singapore (MAS) also weighed in to condemn DBS. Calling the incident “unacceptable”, MAS said it takes seriously the reliability of banks’ critical IT systems and added that DBS has fallen short to “maintain high system availability and ensure its IT systems are recovered expeditiously”. “MAS will take the commensurate supervisory actions after gathering the necessary facts,” it said. Just last night,, MAS further announced an additional capital requirement imposed on DBS Bank in response to the widespread unavailability of the bank’s digital banking services on 29 March and subsequent disruption to its digital banking and ATM services on 5 May. The additional capital requirement amounts to approximately S$1.6 billion in total additional regulatory capital, including the capital requirement imposed on DBS in February 2022. Ms Ho Hern Shin, Deputy Managing Director (Financial Supervision), MAS, stated, “DBS Bank has fallen short of MAS’ expectations for banks to deliver reliable services to their customers. The repeated inconvenience caused to the public is unacceptable. The additional capital requirement imposed at this time underscores the seriousness with which MAS treats this matter. DBS Bank must spare no effort in dealing with the underlying issues leading to these disruptions.” And in 2010, MAS similarly penalised DBS for yet another digital outage, disrupting its digital banking services.

History of technical issues in DBS

Friday's disruption was the latest in a spate of incidents in recent years where DBS found itself in hot water over its digital banking services. In addition to the digital outage on 29 March less than 2 months ago, a major incident also happened in November 2021. At the time, Gupta said he would shore up its engineering team and strengthen its recovery protocols. On top of the three disruptions, DBS also came under fire in June 2021 over a payment processing glitch that caused some customers to be charged twice on their credit and debit cards. Meanwhile, the bank’s annual report released on 10 March shows that Gupta’s total pay for last year increased by 13.2 per cent to S$15.4 million. In 2021, his total pay was S$13.6 million, and the year before, S$9.2 million. Ironically in the report, Gupta said that DBS needs to continue strengthening its technology in areas such as site reliability engineering. A former IT person who worked for DBS many years ago told TOC, "In those days before outsourcing and when the IT department was handled mainly by Singaporeans, you never hear about service outages." He was subsequently retrenched when DBS started to outsource its IT work.