In a decisive move to ensure the stability and reliability of digital banking services, the Monetary Authority of Singapore (MAS) has enforced a six-month moratorium on non-essential IT modifications for DBS Bank Ltd. Furthermore, the bank is prohibited from pursuing new business expansions and downsizing its existing branch and ATM operations in Singapore during this period. This decision was made in the wake of persistent service disruptions experienced by DBS Bank this year.
Earlier in April, MAS instructed DBS Bank to commission an impartial third-party assessment of its digital banking support structures. The evaluation highlighted several areas of concern, including System durability, Incident resolution, Change administration and Tech risk governance and supervision.
In response, DBS Bank has devised a phased technology resilience strategy to rectify these issues, enhance its digital service robustness, and ensure preparedness for future digital banking demands. Notably, modifications to its system design will require an extended execution period.
Upon scrutinizing DBS Bank’s corrective action plan, MAS expressed contentment regarding its comprehensiveness and the proactive steps slated to enhance system robustness. The bank’s senior management will be held accountable for any past shortcomings, and the board will amplify its governance model to monitor the roadmap’s execution.
For the next six months, MAS mandates that DBS Bank halts all IT system alterations, barring those related to security, regulatory adherence, and risk management. This step is pivotal to ensure the bank dedicates substantial resources to fortifying its tech risk management frameworks. During this interval, MAS will also withhold approval for any of DBS Bank’s new business proposals.
To safeguard customers and provide alternative transaction methods in case of future digital service hiccups, MAS has also directed the bank to maintain its current branch and ATM dimensions until DBS’s recovery plan shows satisfactory advancement.
MAS plans to evaluate DBS Bank’s remediation endeavors after six months. Depending on the progress, MAS may consider extending or adjusting the imposed measures. Presently, MAS has retained a 1.8x multiplier on DBS Bank’s risk-weighted assets for operational risk, instated post the incidents of March and May 2023.
It is projected to take DBS Bank approximately two years to implement all the structural modifications for bolstering its digital banking service resilience. Despite these efforts, the possibility of sporadic disruptions remains. During such occurrences, MAS anticipates swift service recovery from DBS Bank, accompanied by clear and prompt customer communication.
Ms Ho Hern Shin, MAS’s Deputy Managing Director (Financial Supervision), remarked, “DBS needs to promptly implement measures to assure consistent service while concurrently fortifying its operational fortitude. This six-month hiatus provides the bank with the requisite window to uphold and reinforce customer confidence.”