Various

MAS Orders DBS to Set Aside S$930 Million in Capital Following Major Service Disruption

The Monetary Authority of Singapore (MAS) has imposed an additional capital requirement on DBS Bank following the disruption of its digital banking services for 2 days.

DBS identified a problem with its access control servers which caused the disruption from 23-25 November 2021.

MAS said in a statement that it now requires DBS to apply a multiplier of 1.5 times to its risk-weighted assets for operational risk.

Based on DBS’ financial statements as of 30th September 2021, this would mean an additional amount of approximately S$930 million in regulatory capital.

This is four times higher than the amount for a similar disruption of digital banking services in DBS in 2010, when MAS had applied a multiplier of 1.2 times to DBS’ operational risk weighted assets, equivalent to approximately S$230 million in additional regulatory capital.

MAS had also noted deficiencies in DBS Bank’s incident management and recovery procedures to restore its digital banking services to a normal state, resulting in the prolonged duration of the disruption.

This has lead the regulator to instruct DBS to appoint an independent expert to conduct a comprehensive review of the incident, including the bank’s recovery actions.

The independent review is also required to assess how a similar incident can be prevented in future.

MAS added that the additional capital requirement will be reviewed when it is satisfied that DBS has addressed the identified shortcomings.

Marcus Lim

Marcus Lim, Assistant Managing Director (Banking and Insurance) at MAS, said,

“MAS requires financial institutions to have robust controls and processes to ensure the reliability and resilience of their IT systems and the continuous delivery of essential financial services to their customers.

MAS will take appropriate supervisory action against any financial institution that falls short of our regulatory expectations.”