In an era where every single piece of information is going into the cloud, the banking sector has, like other sectors, found itself at the crossroads of unprecedented data volumes and the need for better efficiency.
Like many other industries, the sector relies extensively on data-driven information to provide seamless and secure financial services.
In Singapore, the three banks, DBS Group Holdings, Oversea-Chinese Banking Corporation (OCBC) and United Overseas Bank U11 (UOB) have placed considerable stores in digitalisation, with their internet banking and mobile app initiatives being one of them.
In this context, establishing and utilising data centres have proven to be integral to the sector’s infrastructure.
The importance of data centres to banks was clearly illustrated during the widespread outage by DBS’s and Citigroup’s customers in October 2023. The repercussions were substantial, with about 2.5 million transactions reported to be affected during the outages.
After investigations, the outages were found to have been caused by a technical issue at an Equinix data centre, which was used by both DBS and Citi. DBS apologized for the digital disruptions on Nov 1, 2023, two weeks after the incident, and promised to improve its service reliability at the end of a “comprehensive roadmap to improve technology resiliency”.
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“Should disruptions occur, the remediation measures being implemented will shorten the time taken for recovery,” said the bank.
After the outage, The Edge Singapore spoke to the three local banks about their approach towards data centres and came away with two contrasting answers.
On the one hand, OCBC and UOB favoured managing their own centres, citing having “absolute control” over their processes. On the other, DBS said that it still preferred to entrust its data centre operations to third-party service providers, noting that many other large organisations conduct the same practice.
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Unlike its peers, DBS chose to outsource the running of its data centres 15 years ago. “We have no plans to take on data centre management,” said DBS CEO Piyush Gupta in November 2023, at the bank’s results briefing for the 3QFY2023 ended Sept 30, 2023. Should DBS prefer to run its data centres, it would be very hard to achieve the same level of resiliency, he added.
In contrast, OCBC opened its new regional data centre in March 2018 while UOB revealed, also during its results briefing for the 3QFY2023 ended Sept 30, 2023, in October 2023, that it had owned its regional data centre for about 20 years and was constructing another.
OCBC’s head of group operations and technology, Praveen Raina shared, in a previous interview with The Edge Singapore, that the bank wanted to have “absolute control over its security, design, and one that is completely tailored to the bank’s exact requirements and physical access.”
“It eliminates the risk of unavailability of space or capacity when needed and removes any risks associated with interdependency on other tenants’ activities, which is the case in shared facilities,” he added.
UOB also chose to have control and stability over its data centre, with the bank’s deputy chairman and CEO Wee Ee Cheong noting that technology can break down at any time and that the bank had to be prepared for it.
