DBS Singapore told to set aside SGD1.6 billion by MAS after digital banking outage

DBS Singapore, one of the top banks in South Asia, has been ordered by the Monetary Authority of Singapore (MAS) to make an additional provision to cover any losses following the latest outage in the bank’s digital services.

DBS Singapore has been pulled up by MAS for its repeated service outages. Photo: Connected to India

The outage on May 5 was intermittent, while the outage on March 29 lasted nine hours, and that in November 2021 lasted two days. Though the duration of outage has sharply decreased, MAS took a strict view of the repeated interruptions in service and told the bank to set aside additional capital, on top of the requirement imposed after the 2021 outage.

This is a penalty of sorts, and it means the bank now has to have a total of SGD1.6 billion set aside as provision, up from the previous regulatory requirement of SGD930 million.

MAS has also asked DBS to include the May 5 outage in its enquiry into the March 29 outage. The bank had its annual general meeting on March 31, when DBS Chairman Peter Seah said that the bank would have external experts look into that outage. Now the scope of that expert review has to be expanded.

The Singapore regulatory authority had called yesterday’s outage “unacceptable”, as it had significantly inconvenienced the public. Responding to user comments on social media, DBS said yesterday: “We seek your kind patience to try again later due to high login traffic volume.”

In a MAS media release yesterday, MAS Deputy Managing Director (Financial Supervision) Ho Hern Shin said that the top bank had “fallen short of MAS’ expectations for banks to deliver reliable services to their customers”.

Apologising for the recent disruptions, DBS CEO Piyush Gupta said that the bank was “committed to doing better” and that the review was “a matter of utmost priority”.

The capital provision requirement, acting as a buffer against losses arising from disruptions, is calculated as a multiplier of risk-weighted assets for operational risk. Following the November 2021 outage, a 1.5 times multiplier was imposed on DBS in February 2022, and the new requirement is a 1.8 times multiplier. MAS has indicated that even the new multiplier might be modified, depending on the outcome of the expert review.