The Monetary Authority of Singapore (MAS) has imposed on DBS Bank an additional capital requirement, following the widespread unavailability of DBS Bank’s digital banking services on 29 March 2023 and the subsequent disruption to its digital banking and ATM services on 5 May 2023. Together with the additional capital requirement imposed on DBS in February 2022, this translates to approximately SGD 1.6 billion ($1.2 billion) in total additional regulatory capital.
The additional capital requirement on DBS is now a multiplier of 1.8 times its risk-weighted assets for operational risk, an increase from the multiplier of 1.5 times that MAS applied in February 2022 following the November 2021 disruption. MAS may subsequently vary the size of the multiplier depending on the outcome of ongoing reviews.
After the March incident, DBS convened a Special Board Committee to oversee a full review of the bank’s IT resiliency, to be performed by an independent external expert. MAS had then directed DBS Bank to conduct a comprehensive review, including assessing the adequacy of management oversight, staff competencies, operational processes, system resiliency, and architecture design for its digital banking services. Although the causes of the March and May incidents appear distinct, MAS has now required the review to cover the May incident as well.
MAS has also required DBS Bank to take immediate steps to improve the resiliency and recoverability of its existing system, including enhanced monitoring, more comprehensive testing and additional system redundancies, in order to minimise disruption of its services to its customers.
Ho Hern Shin, deputy managing director of Financial Supervision at MAS said, “DBS Bank has fallen short of MAS’ expectations for banks to deliver reliable services to their customers. The repeated inconvenience caused to the public is unacceptable. The additional capital requirement imposed at this time underscores the seriousness with which MAS treats this matter. DBS Bank must spare no effort in dealing with the underlying issues leading to these disruptions”.
Re-disseminated by The Asian Banker