SINGAPORE: DBS Bank Ltd (DBS Bank) Chairman Peter Seah issued an apology on Wednesday (1st November) for the bank’s failure to meet the expected standards amidst a series of digital disruptions this year. He emphasized that senior management would be held accountable, particularly in terms of their “compensation”.

In an official statement released on the same day, Mr Seah acknowledged the bank’s inability to meet these expectations, recognizing the instances throughout the past year when DBS had not adhered to its own set standards.

“As an acknowledgement that the bank could have done better, senior management will be held accountable, and this will be reflected in their compensation.”

Following the announcement by the Monetary Authority of Singapore (MAS) that it has imposed restrictions on DBS, including a ban on new business acquisitions and non-essential IT changes for six months, Mr Seah made statements addressing the matter.

In addition to the IT changes freeze, MAS has instructed DBS Bank not to decrease the size of its branch and ATM networks to ensure customers have alternative channels during disruptions.

In response to these regulatory measures, DBS said they initiated a comprehensive plan aimed at enhancing technology resiliency.

This plan encompasses both immediate and long-term strategies, focusing on reinforcing technology governance, human resources and leadership, as well as refining systems and processes.

The development of this plan followed an assessment conducted by Accenture, an external consultancy firm appointed to scrutinize the bank’s operations in the aftermath of a full-day service outage in March.

“The findings of the Accenture review – completed in August – were also corroborated against recent disruptions – the Sep 26 incident impacting FAST/PayNow transactions, the Oct 14 data centre incident, as well as the Oct 20 incident when some customers had intermittent access to DBS PayLah!,” the bank said.

DBS says they are strengthening system resilience and process enhancement

In the recent statement, the bank emphasized its dedication to fortifying system resilience and enforcing stricter protocols regarding change management.

The bank underscored that these structural enhancements would require a significant timeline for full implementation, estimating completion within 12 to 24 months.

“With these changes, customers can expect to see concrete improvements in both service availability and service recovery in the coming months and over the longer term.”

As part of its strategic initiatives, DBS outlined specific measures, including the establishment of new service availability benchmarks for key digital banking services such as balance enquiries, overseas payments, and domestic payments.

“Should one of these services become temporarily unavailable on a particular digital channel, the bank will ensure that the service is available on an alternative digital channel,” DBS said.

“The bank pledges to limit downtime, where each service is completely unavailable across all digital channels, to no more than an average of 1.5 hours per month over a three-month period. This is a commitment DBS aims to deliver on within the next six months, and continuously improve on.”

To adhere to MAS regulations, DBS confirmed its commitment to maintaining downtime for critical systems within a strict four-hour limit over any 12-month duration.

DBS also emphasized its intention to sustain its network of physical touchpoints, which includes branches, self-service banking machines (ATMs and video teller machines), and POSB Cash-Points at various merchant outlets like Giant, Cold Storage, 7-Eleven, and SingPost.

In cases of necessity, the bank revealed plans to open branches on Sundays and public holidays to provide an alternative service channel for its customers.

DBS CEO Piyush Gupta apologised for the series of digital disruptions

DBS CEO Piyush Gupta expressed sincere regret for the recent series of digital disruptions, further announcing the allocation of a dedicated budget of S$80 million (US$58.4 million) to reinforce system resilience.

“We are deeply sorry for the digital disruptions. Over the years, DBS has focused on digital transformation so as to make banking simple, seamless and effortless. ”

“However, we acknowledge that we must now do better to deliver on this, and are taking a multitude of actions across technology governance, people/leadership, systems and processes,” he stated.

“Our assurance to customers is that they can expect these actions to deliver concrete improvements in the near term and over time. In particular, apart from complying with regulatory requirements on system availability, we are committing to additional targets we are setting for ourselves on ensuring high service availability as well.”

Back in March, DBS leaders issued a similar apology, highlighting the unacceptability of customers encountering difficulties when trying to access digibank services, an issue that resurfaced 16 months after a similar incident in November 2021.

At that time, Mr Seah emphasized, ‘Our customers have every right to expect more of us.”

In November 2021, DBS faced a two-day disruption of its digital banking services, leading MAS to impose supplementary capital requirements on the bank.

Series of service disruptions plague DBS Bank, prompting MAS action

On 14 October this year, a significant service disruption at DBS occurred during which online banking and payment services encountered substantial outages. Customers also encountered challenges in withdrawing cash from ATMs.

On 20 October, there was a brief disruption to its services which was due to a cooling issue at a data centre which implicated various other companies.

Previously, the bank faced a significant 6½-hour service interruption on 5 May due to human error, and a prolonged 12-hour disruption in March attributed to software bugs.

Singapore’s President, Mr Tharman Shanmugaratnam, in his former capacity as the Chairman of MAS, had addressed similar system resilience concerns in April and July this year over the past two disruptions experienced by DBS.

He emphasized that DBS had embarked on strategic enhancements to its digital banking system, underscoring the importance of robust access control, system redundancy, comprehensive monitoring, and efficient restoration processes.

However, despite these assurances, the recent incident underscores persistent gaps in the banks’ digital resilience strategies, raising questions about the efficacy of redundancy systems and preventative measures.