Date: For Parliament Sitting on 5 July 2023

Name and Constituency of Member of Parliament

Dr Tan Wu Meng, Jurong GRC 

Question:

To ask the Prime Minister (a) what is the cause of the disruption to DBS Bank's digital banking services and physical ATM services on 5 May 2023; and (b) what is being done to strengthen the reliability and resilience of retail banks with significant market share in Singapore, especially with regard to digital banking services.

Answer by Mr Tharman Shanmugaratnam, Senior Minister and Minister in charge of MAS:

1. My response will cover the questions raised by both Dr Tan Wu Meng in today’s Order Paper and Mr Desmond ChooPQ from Mr Desmond Choo filed for Parliament Sitting on 4 July 2023: Mr Desmond Choo: To ask the Prime Minister in view of the second disruption to DBS's digital banking services in the last two months (a) whether MAS will be taking action to investigate the root causes; (b) whether the further additional capital requirement imposed by MAS on DBS Bank following the second disruption will be adequate; and (c) whether MAS will be sharing any preliminary findings by the DBS Special Board Committee. filed for yesterday’s Sitting.

2. The disruption of DBS Bank’s digital banking services on 5 May 2023 intermittently affected customers’ access to internet and mobile banking, electronic payment, and ATM services. DBS fully restored affected services after 6.5 hours. MAS has stated publicly that it regards this second disruption within a period of two months as unacceptable, and that DBS had fallen short of MAS’ expectation for banks to deliver reliable services to their customers.

3. DBS’ preliminary investigations showed that the disruption was due to human error in coding the programme that was used for system maintenance. The error led to a significant reduction in system capacity, which in turn affected the system’s ability to process internet and mobile banking, electronic payment, and ATM transactions. According to DBS, the cause of the incident was unrelated to the earlier March 2023 disruption, which was caused by inherent software bugs.

4. Following the March 2023 incident, DBS convened a Special Board Committee to oversee the root cause investigation and a comprehensive review of the bank’s IT resilience. Following the May 2023 disruption, MAS has required the Special Board Committee to extend its review to cover the latest incident and to use qualified independent third parties for the review. More details on the disruptions will be provided by the bank publicly when the review is completed.

5. The imposition of capital requirements on DBS reflects the seriousness with which MAS views the recent disruptions and the impact that they have had on customers. MAS may vary the size of the additional capital requirement imposed on the bank and take other regulatory actions depending on the outcome of ongoing reviews.

6. MAS requires all retail banks in Singapore to ensure that their mission critical systems supporting digital banking are resilient. This includes having the ability to recover quickly from any system disruptions.

7. Banks are subject to regular inspections and off-site reviews by MAS to ensure their adherence to regulatory requirements and expectations. Further details on MAS’ supervisory approach have been explained to this House on 21 April 2023See “Written reply to Parliamentary Question on major banking disruptions that have lasted more than an hour in the last five years ”..