MAS imposes additional capital requirement on DBS bank following repeated service disruptions

In a statement late Friday, the Monetary Authority of Singapore (MAS) announced that it had imposed an additional capital requirement on DBS Bank Ltd (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.

The additional capital requirement on DBS Bank is now a multiplier of 1.8 times to its risk-weighted assets for operational risk, an increase from the multiplier of 1.5 times that MAS applied in February 2022 following the November 2021 disruption.

MAS may subsequently vary the size of the multiplier depending on the outcome of ongoing reviews.

Review for March’s disruption to cover May’s as well

MAS had directed DBS Bank to conduct a comprehensive review, including an assessment of the adequacy of management oversight, staff competencies, operational processes, system resiliency, and architecture design for its digital banking services.

Although the causes of the March and May incidents appear distinct, MAS has now required the review to cover the May incident as well.

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, in order to minimize disruption of its services to its customers.

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.”

45 mins disruption acknowledged by DBS

Customers of DBS and POSB Bank in Singapore experienced service disruptions on 5 May, as they were unable to use digibank online and mobile services.

DBS acknowledged the issue at 12.40 pm, attributing the problem to higher than normal traffic volumes for digibank login.

However, according to downdetector.com, the reports on disruption for services both DBS and POSB started at around 11 am, and there had been a brief surge of reports at around 5 pm for about 30 mins after DBS said its services had resumed since 1.30 pm.

This marks the third disruption in 18 months that the bank’s digital services have faced significant outages.

In a statement on Friday evening, DBS Chief Executive Piyush 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.