MAS Sets New Requirement for DBS After the Latest Massive Disruption

“Auntie, paiseh my PayLah! not working again.”

Unless you’re lucky enough to be a non-DBS customer, you probably have already heard of DBS’s latest banking service outage. This is their third massive disruption in less than two years, and you can bet your bottom dollar that the Monetary Authority of Singapore (MAS) isn’t going to let them off easy.

MAS has issued a statement detailing new requirements for DBS after Friday’s outage.

MAS Directs DBS to Set Aside Additional Capital Requirements

On Friday (5 May), DBS banking services went down (again) in the afternoon, affecting the full slate of DBS’s services, including the PayLah! mobile wallet, ATM withdrawals, Paywave, DBS/POSB digital banking and DBS Vickers mTrading.

Fortunately, unlike the notorious two-day-long November 2021 outage or the nine-hour-long outage in March, this time, digital services were up and running again in 45 minutes.

“Making Banking Joyful“, indeed. How else would you get the opportunity to think twice about checking out your cart on Shopee?

However, MAS doesn’t really agree with the “joyful” point. After the outage, MAS has new expectations of the bank.

According to a statement issued by MAS following Friday’s disruption, MAS has imposed an additional capital requirement on DBS.

We know not all of us are finbros here, so here’s a crash course on capital requirements.

The more risk a bank has, the more capital it needs to protect people like you and me in times of crisis or unexpected losses. The capital requirement is the amount of capital a bank must have, as decided by the financial regulator, which in Singapore is MAS.

So, the higher the risk, the higher the capital requirement (usually). Of course, this is just a TLDR.

Considering the massive disruptions to DBS’s banking services in recent years, it’s no wonder that MAS has imposed additional capital requirements on DBS.

Earlier in February last year, following DBS’s November 2021 outage, MAS already imposed an additional capital requirement on DBS, bringing the additional regulatory capital set aside by DBS to $930 million.

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After the two additional outages this year, MAS has now increased the multiplier applied to DBS’s risk-weighted assets for operational risk from 1.5x to 1.8x. Now, the total additional regulatory capital DBS must set aside amounts to approximately $1.6 billion.

However, MAS may subsequently revise the size of the multiplier depending on how ongoing reviews pan out. In other words, it all goes back to whether DBS eventually gets down to business.

DBS’s Special Board Committee to Oversee the March and May Outages 

After the disruption to DBS’s digital banking services in March, a special board committee was set up by DBS to review the outage.

We don’t know whether it’s because the committee zuo bo or because the bank is just this suay, but after Friday’s outage, it’s clear that more must be done.

MAS has directed this special board committee to oversee the March and May service outages, calling for DBS to “conduct a comprehensive review” of everything you can think of—from staff competencies to system resiliency.

Whoever gets fired from DBS within the next few weeks, you know the reason why. It’s time to keep your eyes peeled for positions at DBS on job search platforms.

According to their statement, MAS has also required DBS to “take immediate steps to improve the resiliency and recoverability of its existing system” to “minimise disruption of its services to its customers”.

We’ll see whether this pans out well from the comments on DBS’s Facebook page in the coming weeks.

Regardless, the DBS CEO, Piyush Gupta, apologised in a statement on Friday night, adding that all committee recommendations will be put into place swiftly.

Well, they better. You can see from miles away what Singaporeans will say about his salary if DBS has another outage again.

DBS on Thin Ice with MAS (and with Singaporeans)

Friday’s banking service outage was the third disruption to DBS’s banking services in less than two years.

First, the two-day-long disruption in November 2021, followed by the nine-hour-long one in March and the most recent addition to DBS’s slate of outages, Friday’s disruption.

It’s no secret that DBS customers have been pretty dulan with these outages, but these Singaporeans aren’t the only ones.

MAS’ Deputy Managing Director (Financial Supervision), Ms Ho Hern Shin, also appears to be driven up the wall by DBS.

“DBS Bank has fallen short of MAS’ expectations for banks to deliver reliable services to their customers. The repeated inconvenience caused to the public is unacceptable,” Ms Ho said in MAS’ statement on Friday.

With any hope, we won’t see another error pop up on PayLah! again anytime soon.