The Monetary Authority of Singapore (MAS) has imposed a six-month pause on DBS Bank’s D05 non-essential IT changes to ensure that the bank keeps sharp focus on restoring the resilience of its digital banking services.
The bank will not be allowed to acquire new business ventures during this period or reduce the size of its branch and ATM networks in Singapore. The actions were taken following the repeated and prolonged disruptions of DBS’ banking services this year.
In April, MAS had directed DBS to engage an independent third-party to conduct a comprehensive review of the effectiveness and adequacy of the people, processes and technology supporting its digital banking services.
Shortcomings were identified in the following areas — system resilience; incident management; change management; as well as technology risk governance and oversight.
Following the independent review, DBS has set out a technology resiliency roadmap to address the shortcomings, improve system resilience and better position the bank to meet future digital banking needs. The roadmap is being implemented in phases, with the changes affecting its system architecture design taking more time to complete.
The regulator has reviewed DBS’s remediation plan under the roadmap and is satisfied with its scope and the planned measures to improve system resilience. In line with MAS’ expectations, DBS will hold senior management accountable for the lapses and the board will enhance its governance approach to oversee implementation of the roadmap.
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MAS will review the progress made by DBS Bank on its remediation efforts at the end of six months. The regulator may extend the duration of the measures, vary the additional capital requirement currently imposed, or take further actions at that point.
Separately, the DBS board and management has put out a statement apologising for the series of digital disruptions this year, adding that the bank is addressing the issues at hand with utmost priority.
“With the incidents of the past year, we have failed to live up to these expectations, and have also fallen short of our own standards. As an acknowledgement that the bank could have done better, senior management will be held accountable, and this will be reflected in their compensation,” says DBS chairman Peter Seah.
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“Over the past few months, the bank has been making every effort possible to strengthen our resiliency and business continuity, and to be able to recover more quickly when incidents happen. This is a work in progress, and we seek customers’ patience as we work through our remedial actions,” he adds.
DBS CEO Piyush Gupta says the bank will also be setting aside a special budget of $80 million to enhance system resiliency. “Our assurance to customers is that they can expect these actions to deliver concrete improvements in the near term and over time.”
Meanwhile, MAS deputy managing director (financial supervision) Ho Hern Shin says DBS must put in place immediate measures to ensure service reliability while it continues to invest in the longer-term efforts to bolster its operational resilience. “We have imposed this six-month pause on the bank to give it the space to take the actions needed to maintain customer trust.”
Shares in DBS closed 18 cents higher or 0.55% up on Nov 1 at $33.03.
