DBS apologises for 'embarrassing' service outage that MAS found unacceptable

SINGAPORE – DBS Bank has apologised to its shareholders and customers for disruptions to its digital banking services.

Singapore’s largest bank said during its annual general meeting (AGM) on Friday that it will also set up a special board committee to look into the cause of the disruptions, which left many of its customers unable to carry out their online banking activities on Wednesday.

Chief executive Piyush Gupta said the disruptions, the second time in 16 months, has been “sobering” for DBS.

“As such a well known digital and technology bank, this embarrasses us. We are committed to doing better,” he said.

“Ensuring uninterrupted digital banking services 24/7 has been our key priority. Unfortunately, we fell short of it and are truly sorry,” he said during the AGM, which saw DBS chairman Peter Seah bowing to shareholders to show his regret at the incident.

Customers of Singapore’s largest bank were unable to access DBS digibank online and mobile services, as well as the popular PayLah app and investment platform DBS Vickers from early Wednesday morning until about 5.30pm, said the bank on Friday.

Mr Gupta said the bank had worked with independent experts to strengthen its recovery protocols, shore up its engineering team and better understand its third-party systems.

“But unfortunately, it was not enough,” he said, adding that only 40 to 50 per cent of its customers could access its online services on Wednesday.

He added that the bank decided to carry out the next stage of its recovery protocols after lunchtime. This involved firing up a backup server – a process that took nearly two hours and involved “a complete downtime”.

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The digital services started recovering at 4pm and the bank fully restored them around 5.30pm.

A thorough review of the incident is underway and it is still too early to figure out what the exact problem is, said Mr Gupta.

Mr Seah called the incident “very unfortunate and disappointing”.

“Our customers have every right to expect more of us. So, underscoring the gravity of the matter, we will be convening a special board committee with immediate effect, to conduct a full and detailed investigation of the incident.”

The committee will include board members – independent director Olivier Lim, body committee chairman Tham Sai Choy, tech expert and veteran banker Bonghan Cho, and GovTech board member Chng Kai Fong.

“In addition, we will engage external experts with broad and deep experience in overseeing large-scale IT systems and operations to work with the committee. I have full confidence that they will be thorough and exacting in their review and recommendations,” said Mr Seah.

Mr Gupta added that the bank’s management will provide the necessary support to the special board committee.

In response to queries about the latest disruption, the Monetary Authority of Singapore (MAS) called it “unacceptable” and said it takes seriously the reliability of banks’ critical IT systems.

DBS has fallen short of the regulator’s expectations to “maintain the availability of systems at a high level”, it said on Wednesday.

MAS added that it has instructed the bank to conduct a thorough investigation to establish the root cause of the disruption and submit the findings to the regulator. 

“MAS will take the commensurate supervisory actions after gathering the necessary facts,” it said.

Wednesday’s disruption was the latest in a spate of incidents in recent years where the lender has found itself in hot water over its digital banking services.

DBS was slapped with a $930 million penalty last year following a widespread outage of its digital banking services in Nov 2021. A malfunctioning access control server had disrupted services for DBS Bank and POSB users over three days, resulting in the bank’s worst digital disruption in a decade.

The penalty meant the local bank had to set aside an additional $930 million in regulatory capital – funds it could have spent on investments and hiring – to guard against operational risks.

This amount was also four times higher than the $230 million DBS had to set aside for a similar disruption of its digital banking services in 2010.

DBS also came under fire in June 2021 for a payment processing glitch that caused some customers to be charged twice for transactions made on credit and debit cards. Affected customers had received automatic refunds.

On March 24, PayLah users also faced delays in receiving their cashback when they made payments in the hopes of claiming a $3 meal subsidy offered by the bank. These delays were caused by a high volume of logins, the bank said then.

This article was first published in The Straits Times. Permission required for reproduction.