The Monetary Authority of Singapore (MAS) has enforced a six-month suspension on DBS Bank's non-essential IT changes, new business pursuits, or downsizing of branch or ATM networks. The decision follows the banking disruptions that occurred in October due to a technical glitch at the Equinix (NASDAQ:EQIX) data center. This measure aims to redirect the bank's efforts towards enhancing its digital banking services' robustness.
On October 14, 2023, during a planned system upgrade, an error in the cooling system at the Equinix data center led to outages at DBS and Citibank, disrupting 2.5 million payment transactions. The incident left online banking apps fully or partially unavailable for about two days in Singapore, a city heavily reliant on digital finance. These outages resulted in 810,000 failed attempts to access the two platforms and prevented 2.5 million payment and ATM transactions from being completed.
Equinix attributed the glitch to a contractor who incorrectly signaled to close valves from the chilled water buffer tanks. Despite activating their IT disaster recovery and business continuity plans, both DBS and Citibank encountered technical difficulties that hindered full recovery at their backup data centers. The downtime exceeded MAS's resilience requirements for critical IT systems as it surpassed the authority's limit of four hours within any 12-month period.
As a result, MAS imposed penalties on DBS, including a six-month prohibition on branch and ATM network size reduction, non-essential IT changes, and new business acquisitions. Additionally, DBS was required to apply a multiplier of 1.8 times to its risk-weighted assets for operational risk.
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