DBS Faces 6-Months Freeze on IT Changes, New Ventures, and Branch/ATM Reductionby Fintech News Singapore November 2, 2023
The Monetary Authority of Singapore (MAS) has imposed a six-month pause on non-essential IT changes at DBS Bank and prohibited the bank from acquiring new business ventures in response to recent disruptions to its digital banking services.
DBS had experienced major disruptions to its banking services this year on 29 March, 5 May, 26 September, 14 and 20 October 2023.
During this period, DBS was also directed against reducing the size of its branch and ATM networks in Singapore to ensure customers still have access to banking services during any disruptions.
DBS anticipates that it will take up to 24 months to implement planned structural changes aimed at improving the resilience of its digital banking services.
During this period, customers may still experience disruptions, but MAS expects the bank to promptly recover services and communicate effectively with its customers.
In April 2023, DBS had to undergo an independent review of its digital banking services’ effectiveness and adequacy. Shortcomings were identified in areas such as system resilience, incident management, change management, and technology risk governance.
Following the review, DBS outlined a technology resiliency roadmap to address these issues and improve system resilience. MAS has reviewed and approved this remediation plan and expects the bank to hold the senior management accountable for the lapses.
It’s important to note that MAS will retain the multiplier of 1.8 times to DBS Bank’s risk-weighted assets for operational risk, a measure imposed after the incidents in March and May 2023.
Together with the additional capital requirement imposed on DBS in February 2022, this translates to approximately S$1.6 billion in total additional regulatory capital.
Ho Hern Shin, Deputy Managing Director (Financial Supervision), MAS, said,
“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.”