Singapore's MAS Restricts DBS from New Business Ventures

02 Nov, 2023

Singapore's MAS Restricts DBS from New Business Ventures

MAS Takes Firm Action Against DBS Over Service Disruptions

In response to a series of service disruptions, the Monetary Authority of Singapore (MAS) has imposed stringent measures on DBS. The bank will not be permitted to reduce the size of its branch and ATM networks in Singapore to ensure that customers have alternative channels during any potential disruptions. This directive will remain in place until MAS is satisfied with DBS's progress in enhancing operational resilience.

MAS noted that service disruptions could continue during the 24 months DBS has allocated to implement structural changes aimed at bolstering the resilience of its digital banking services. To further underscore the significance of the issue, DBS Chairman Peter Seah acknowledged the bank's failure to meet customer expectations and affirmed that senior management will be held accountable, reflecting in their compensation.

The restrictions extend to non-essential IT changes for six months, requiring DBS to focus on enhancing technology risk management systems and controls.

DBS CEO Piyush Gupta expressed regret for the disruptions and announced the allocation of a special budget of S$80 million (US$58 million) to enhance system resiliency. DBS also outlined its objectives for quicker recovery times in the event of disruptions in key digital banking services.

MAS had earlier mandated DBS and Citibank to conduct thorough investigations after they failed to fully recover their systems within the required timeframe. According to MAS, unscheduled downtime for a critical service affecting bank operations or customer service should not exceed four hours within any 12-month period. The banks are also expected to have backup data centers and systems in place to mitigate such incidents.

DBS aims to recover disrupted services in three hours and has set a target to further improve this to two hours or less within the next two years. The measures imposed are intended to enhance the bank's operational resilience and prevent future service disruptions.

This action by MAS underscores the regulator's commitment to maintaining the stability and reliability of Singapore's financial services industry.