The Monetary Authority of Singapore (MAS) has imposed on DBS Bank Ltd. The regulatory move follows the widespread unavailability of DBS Bank’s digital banking services between 23 and 25 November 2021.
The Singaporean regulator has required DBS Bank to apply a multiplier of 1.5 times to its risk-weighted assets for operational risk. This means the addition of S$930 million in regulatory capital.
This amount is four times higher than the amount for a similar disruption in DBS in 2010. MAS had applied a multiplier of 1.2 times to DBS’ operational risk weighted assets back then, equivalent to S$230 million in additional regulatory capital.
The regulator highlighted that there are deficiencies in DBS Bank’s incident management and recovery procedures to restore its digital banking services to a normal state, resulting in the prolonged duration of the disruption.
The regulator said:
MAS noted deficiencies in DBS Bank’s incident management and recovery procedures to restore its digital banking services to a normal state, resulting in the prolonged duration of the disruption.
MAS has instructed the company to appoint an independent expert to conduct a comprehensive review of the incident, including the bank’s recovery actions. The independent review will also asses how a similar incident can be prevented in future.
DBS Bank must address and remedy all shortcomings identified from the review. The company is required to implement measures to ensure that any future disruption to its digital banking services is resolved quickly and adequately. Mas noted that the additional capital requirement will be reviewed when the regulator is satisfied that DBS Bank has addressed the identified shortcomings.
Marcus Lim, Assistant Managing Director (Banking and Insurance), MAS, said:
MAS requires financial institutions to have robust controls and processes to ensure the reliability and resilience of their IT systems and the continuous delivery of essential financial services to their customers. MAS will take appropriate supervisory action against any financial institution that falls short of our regulatory expectations.
