On Thursday, shares of DBS Group, the largest bank in Southeast Asia, fell by 1.4% following a 10-hour outage of its digital services the day before. The Monetary Authority of Singapore has criticized the bank, stating that the outage was “unacceptable” and that the bank had failed to meet expectations.
DBS was the biggest decliner in terms of index points on Singapore’s benchmark Straits Times Index on Thursday. In response to the outage, MAS has instructed DBS to conduct a thorough investigation to determine the root cause of the disruption and submit its findings to the regulator. The central bank has stated that it will gather the necessary information before taking appropriate action.
The bank’s digital services were unavailable from approximately 8:30 a.m. on Wednesday until 5:45 p.m., preventing users from accessing online banking services or trading via the brokerage. The bank later announced that it would extend its banking services at all branches by two hours.
DBS has reassured its customers that their deposits are safe and its systems were not compromised. CEO Piyush Gupta expressed disappointment in the incident in a statement on Wednesday, noting that the bank holds itself to higher standards and prioritizes reviewing the events that occurred.
In November 2021, DBS faced additional capital requirements from MAS after its digital banking services were disrupted for two days. The bank had to apply a multiplier of 1.5 times to its risk-weighted assets for operational risk, resulting in an additional regulatory capital of SGD 930 million ($700 million). It is likely that MAS will impose a similar penalty for Wednesday’s outage, according to Chong Beng Soon, an associate professor at Nanyang Technological University’s college of business.
However, he does not believe that the incident will have a significant impact on consumer or investor confidence in the bank in the long term. He added that the bank’s strong franchise and reputation will enable it to withstand any negative effects from this incident.