DBS sets up special board committee to investigate online service disruption

DBS has set up a special board committee to look into the cause of the disruption to its digital banking services on Wednesday (Mar 29), the lender said at its annual general meeting (AGM) on Friday.

At the AGM, DBS chairman Peter Seah bowed to shareholders as he expressed regret for the incident.

“Our customers have every right to expect more of us. So, underscoring the gravity of the matter, we will be convening a special board committee with immediate effect, to conduct a full and detailed investigation of the incident,” he said.

The committee includes independent director Olivier Lim, audit committee chairman Tham Sai Choy, tech expert and veteran banker Cho Bonghan, and GovTech board member Chng Kai Fong.

It will also be supported by the bank’s management.

“In addition to these four, we will engage external experts with broad and deep experience in overseeing large-scale IT systems and operations to work with the committee,” Seah added.

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“I have full confidence that they will be thorough and exacting in their review and recommendations.”

DBS chief executive Piyush Gupta also apologised for the disruption and said that the incident was “sobering” for the bank.

“Ensuring uninterrupted digital banking services 24/7 has been our key priority. Unfortunately, we fell short of it and are truly sorry,” he said.

As a well-known digital and technology bank, he added, DBS has been “embarrassed” because of the disruption.

On Wednesday, the bank experienced the second disruption to its digital banking services in 16 months.

Customers were unable to access online services such as the bank’s digibank and PayLah app from about 8.30 am to 5.30 pm.

Gupta said that while the lender had taken steps, including the strengthening of its recovery processes, it was “not enough”.

For a large part of the day, he noted that only about 40 per cent to 50 per cent of customers had access to these online services.

“People who got in could do everything because of the architecture chain, which allowed the other services to continue working. So, if you tried two to three times and could get in, then everything would work,” he said.

However, DBS found that it had to initiate its backup servers to bring back full service.

This led to “complete downtime” of about two hours before some services came back online at 4 pm and full services were restored at 5.30 pm.

Gupta added that a “thorough management review” is underway and it is too early to tell what exactly caused the disruption.

The Monetary Authority of Singapore (MAS) on Wednesday said the disruption was “unacceptable” and that it would take “commensurate supervisory actions” after gathering the facts.

MAS added that it “takes seriously the reliability of banks’ critical IT systems”, and pointed out it has instructed the lender to submit its investigation findings. The regulator previously imposed additional capital requirements amounting to about S$930 million on DBS that were related to the November 2021 disruption.

At Friday’s AGM, the resolution to re-elect Seah as director had 10.25 per cent of votes cast against it. In addition, 9.93 per cent of votes were not in favour of the resolution for general authority to issue shares and to make or grant convertible instruments, subject to limits.

Shares of DBS closed 1.5 per cent or S$0.50 lower at S$33.00 on Friday.