THE Monetary Authority of Singapore (MAS) on Wednesday (Nov 1) imposed restrictions on DBS activities to ensure the bank “keeps sharp focus” on restoring the resilience of its digital banking services.

The directions come after repeated and prolonged disruptions of DBS’ banking services this year.

MAS said in a statement that it has imposed a “six-month pause” on DBS’ non-essential IT changes. During this period, the bank must 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,” MAS said.

The financial sector regulator added that the bank will also not be allowed to acquire new business ventures during this period, or reduce the size of its branch and ATM networks in Singapore.

“This is to ensure there are adequate alternative channels for its customers in the event of further disruptions while the bank works to enhance the operational resilience of its digital channels,” MAS said.

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The direction for DBS to not reduce the size of its branch and ATM networks will be in force until MAS is satisfied with the progress of the bank’s remediation plan.

In April, MAS directed the lender to engage an independent third-party to conduct a comprehensive review of the effectiveness and adequacy of the people, processes, and technology supporting its digital banking services.

Shortcomings were identified in system resilience, incident management, change management and technology risk governance and oversight.

In a bourse filing on Wednesday, DBS’ board and management apologised for the series of digital disruptions this year, and said the bank is addressing the issues “with utmost priority”. Apart from the recent disruptions that occurred on Oct 14 and Oct 20, the lender also experienced major disruptions to its banking services on Mar 29, May 5, and Sep 26.

The bank has set out a “technology resiliency road map” to address the shortcomings and improve system resilience. The road map is being implemented in phases, with the changes affecting its system architecture design taking more time to complete.

MAS noted that DBS would hold senior management accountable for the lapses, and the board will enhance its governance approach to oversee the implementation of the road map.

DBS CEO Piyush Gupta said the bank is “deeply sorry” for the digital disruptions, and added that the lender has set aside a special budget of S$80 million to enhance system resiliency.

DBS chairman Peter Seah also apologised on behalf of the board for the digital banking disruptions.

“When customers bank with us, they expect to be able to access our banking services conveniently, and at any time of the day. 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,” he said.

“As an acknowledgement that the bank could have done better, senior management will be held accountable, and this will be reflected in their compensation.”

DBS will take up to 24 months to put in place the planned structural 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 to promptly recover its services and communicate to its customers in a clear and timely manner,” the regulator said.

MAS will review the progress made by the bank on its remediation efforts at the end of the six-month period. The regulator may extend the duration of the measures, vary the additional capital requirement currently imposed, or take further actions at that point.

MAS said it will retain the multiplier of 1.8 times to DBS’ risk-weighted assets for operational risk, which was imposed after the March and May incidents.

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.”

DBS said that when the road map is completed, customers will see improved service reliability. Should disruptions occur, the remediation measures being implemented will shorten the time taken for recovery.

“Our assurance to customers is that they can expect these actions to deliver concrete improvements in the near term and over time,” Gupta said. “In particular, apart from complying with regulatory requirements on system availability, we are committing to additional targets we are setting for ourselves on ensuring high service availability as well.”