SINGAPORE - For six months, DBS Bank will have to suspend non-essential changes to its IT systems, and will not be allowed to take on new business ventures, the Monetary Authority of Singapore (MAS) said on Wednesday (Nov 1).

MAS said it directed DBS to suspend all changes to its IT systems, except for those related to security, regulatory compliance and risk management.

"This is to ensure that the bank dedicates the needed resources and attention to strengthen its technology risk management systems and controls," it said. DBS will also not be allowed to reduce the number of its branches and ATMs.

The pause imposed by the regulatory body on the Republic's largest bank comes after a series of disruptions to its services throughout the year.

The bank experienced major disruptions to its banking services on March 29, May 5, Sept 26, as well as Oct 14 and 20. The Oct 14 outage lasted 12 hours, affecting the bank's digital services and automated teller machines (ATMs).

During this six-month period, the authority will not approve any new business acquisitions made by the bank either.

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MAS said the move to disallow DBS from reducing the number of its branches and ATMs would ensure that there are enough alternatives for the bank's customers if there are new disruptions. This directive will remain in place until MAS is satisfied with DBS' progress in enhancing its operational resilience, the authority added.

MAS will review DBS' progress at the end of six months, and may extend the duration of these measures, vary the additional capital requirement currently imposed, or take further action.

DBS currently has an additional capital requirement of about $1.6 billion, which MAS imposed in May. This followed a disruption to the bank's digital banking and ATM services on May 5, which was preceded by a widespread disruption on March 29.

It also had to apply a multiplier of 1.8 times to its risk-weighted assets for operational risk. This was marked up from the 1.5 times multiplier applied in 2022, after it suffered its worst outage in more than a decade in November 2021.

MAS added that it will take up to 24 months for DBS to execute the planned changes to improve the resilience of its digital banking services.

"In the meantime, it is possible that disruptions may still occur. In such situations, MAS expects DBS Bank to promptly recover its services and communicate to its customers in a clear and timely manner," MAS said.

Ms Ho Hern Shin, deputy managing director of financial supervision at MAS, said: "DBS must put in place immediate measures to ensure service reliability while it continues to invest in the longer-term efforts to bolster its operational resilience.

"We have imposed this six-month pause on the bank to give it the space to take the actions needed to maintain customer trust." 

In a press statement, DBS chairman Peter Seah apologised for the digital banking disruptions.

"With the incidents of the past year, we have failed to live up to these expectations, and have also fallen short of our own 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," he said.

He added that, in the past few months, DBS has been trying to strengthen its resiliency and business continuity, and to be able to recover more quickly when incidents happen.

"This is a work in progress, and we seek customers' patience as we work through our remedial actions," Mr Seah said.

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