Singapore’s financial regulator pledged to take action against DBS Group Holdings Ltd. after customers lost access to accounts using mobile-phone apps and websites, in a second major incident in 16 months.
(Bloomberg) — Singapore’s financial regulator pledged to take action against DBS Group Holdings Ltd. after customers lost access to accounts using mobile-phone apps and websites, in a second major incident in 16 months.
Disruptions lasting about 10 hours Wednesday prompted the Monetary Authority of Singapore to order an investigation. Chief Executive Officer Piyush Gupta said the country’s largest bank “deeply” regrets the inconvenience.
The latest outage is “unacceptable” after the November 2021 episode, the MAS said in a statement. DBS has “fallen short” of expectations to “maintain high system availability and ensure its IT systems are recovered expeditiously,” the regulator said.
Already last year, the city-state’s regulator ordered DBS to set aside S$930 million ($700 million) of regulatory capital after the 2021 episode left thousands of customers unable to log on to its digital platforms for at least two days — one of its worst digital disruptions in the past decade. The issues at the time stemmed from the bank’s access control servers.
Under MAS regulations, financial institutions need to ensure that the maximum unscheduled downtime for each critical system doesn’t exceed four hours within any period of 12 months.
“MAS could impose a similarly-sized extra capital charge on DBS given expectations it should have already taken steps to identify and remedy problems in its digital-banking systems and controls,” said Sarah Jane Mahmud, a Bloomberg Intelligence analyst, adding any action is unlikely to be seen until the third quarter at the earliest.
The bank is also likely to see a migration of deposit accounts to its key competitors, given widespread consumer dissatisfaction amid the two major outages, she said.
Shares of DBS fell as much as 1.7% Thursday, compared with the 0.4% drop in the Bloomberg Asia Pacific Banks Index.
Regulations
Like many other countries around the world, Singapore has been increasingly relying on payments via mobile phones, reducing cash usage.
Customers began reporting issues with the bank’s digital services a little after 7 a.m. local time Wednesday, according to Downdetector. The bank said in a Facebook post the services returned to normal around 5:45 pm. It had extended branch operations by two hours as it worked to recover digital services and a bank’s spokesperson clarified the issue was limited to Singapore.
“We acknowledge the gravity of the situation, appreciate our customers’ understanding, and deeply regret the inconvenience caused,” said Gupta.
–With assistance from Aradhana Aravindan.
(Adds analyst comment in fifth paragraph; updates share price in seventh.)
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