Singapore’s financial regulator is set to direct DBS Group Holdings Ltd. to take further steps to resolve a spate of digital banking service outages.
“The frequency of outages is unacceptable, the slowness in recoverability is unacceptable,” Ravi Menon, managing director of the Monetary Authority of Singapore, said in an Oct 27 interview with Bloomberg News. “The problem is that the largest bank in Singapore with the largest number of customers has had more than its fair share of outages.” MAS will elaborate on what DBS should do this week, he added.
Menon’s criticism of the bank is the strongest signal yet that DBS is likely to face further regulatory censure. The continued disruptions — with at least five this year — have led some analysts to raise the prospect of more severe punishments such as fines. Already, MAS has penalized DBS by raising its capital requirements twice in over a year.
Singapore requires banks to ensure any unscheduled outages that affect their operations or customer services not exceed four hours within a one-year period.
| DBS service disruptions this year |
|---|
| October 20: Intermittent access to mobile wallet services |
| October 14: Data centre glitch led to hours-long disruptions of multiple services; also affected Citigroup’s Singapore unit |
| September 26: Delays to processing transactions on its PayNow digital payments service |
| May 5: Disruption in banking and payment systems |
| March 29: Disruption of digital banking and payment services that lasted about 10 hours |
An Oct 14 weekend outage left DBS customers unable to access multiple services including online banking and ATM cash withdrawals. The disruption, that also affected Citigroup Inc.’s local unit, comes on the heels of similar episodes that DBS has so far struggled to fix.
See also: Deutsche Bank completes sale for US$1 bil US CRE loan portfolio
After the mid-October disruption, MAS ordered DBS and Citi to conduct a thorough investigation on why they were not able to recover their systems within the required time-frame. While the outage had occurred due to a technical issue at an Equinix Inc. data centre used by the lenders, MAS said it expects banks to have contractual agreements with data centre providers that incorporate its requirements on system availability.
At DBS’s annual meeting for shareholders in March, both Chairman Peter Seah and Chief Executive Officer Piyush Gupta apologized for the inconvenience caused following a lengthy disruption that month. Gupta in May called the bank’s infrastructure “robust.”
“There are some bank-specific issues they need to address and they are on top of it,” Menon said. “They will do it and we will hold them accountable.”
See also: MAS Financial Stability Review shows local banks can withstand multiple shocks
Data released in April showed that the seven banks considered to be systematically important to Singapore — which includes DBS and Citi — have reported 17 disruptions that lasted over an hour to their digital banking services since 2018.
Menon said that despite the visibility of DBS’s outages, he did not see this as a systemic issue affecting the whole financial system. “It’s not as if the entire banking system is prone to outages,” he said. “If you look across the banking system, I don’t think we have a problem.”
