As lenders increasingly push customers to online services, the frequency and scale of bank outages have raised serious questions about the resilience and reliability of these services.

On October 1, I reported to NC the increasing number of IT outages in the global banking system. In less than two months thereafter, almost all the online banking platforms and/or mobile applications of British commercial banks failed; Ecuador’s largest bank became a target of hacker attacks, resulting in the suspension of its online services for four days; Mexico’s largest The bank suffered the third national outage since 2021, and the online banking platform of Pakistan’s third largest bank was also shut down due to a cyber attack.

This week it is the turn of one of Asia’s largest banks, Singapore-based DBS Bank, which suffered its worst system outage in 11 years. This is a bank that has won multiple “Best Bank” awards from publications such as Euromoney, The Banker, and Global Finance. It is considered a pioneer in embedding digitization in a full range of banking processes and services.

On Tuesday morning, DBS Bank’s website and mobile application services began to experience disruptions.When customers report that they cannot access the bank’s mobile app or online platform, the bank Released the following message On social media:

“Some of our customers have experienced intermittent slowness when accessing our banking services. We are currently working to resolve this issue. We apologize for the inconvenience caused to you during this time, please try again later.”

Lack of guarantee

Understandably, some customers are dissatisfied with this statement, because there is obviously no “intermittent” or “slow” interruption; many customers’ systems are not working properly.

“Slow means a certain speed no matter how low,” wrote Facebook user Cai Zhaohan. “It doesn’t work at all. Is DBS now starting to cheer for their customers?”

The service interruption lasted until Tuesday, and lasted until late at night. At 2 am (local time) on Wednesday, the bank announced that all digital services had been restored, but received a large number of complaints on social media from angry customers who still could not access their online accounts or mobile apps.This prompted the bank to admit that “the problem of digital banking has[d] It relapsed. “

Given the ever-increasing number of users relying on digital banking transactions and other services, this scale and time interruption is extremely disruptive. The lender has always emphasized that the power outage is not the result of a cyber attack, and that customer accounts and data have not been compromised. On Wednesday afternoon, Shee Tse Koon, the bank’s regional manager, issue a statement Blame the problem on “access control servers”, which are used to verify usernames, passwords, and other identifiers such as biometrics and one-time passwords (OTP).

“We found a problem with our access control server, which is why many of you can’t log in. Since then, we have been working with our third-party engineering providers around the clock to solve the problem and restore our Digital banking services. At the same time, please rest assured that your deposits and funds are safe, and you can continue to meet your banking needs through our branches or telephone banking.”

Given that DBS, like most large lenders in advanced economies, has closed many branches in the past decade, even in densely populated areas and major business districts, the last sentence may not be too reassuring.

The bank’s IT problems seemed to continue until Thursday. “Although customers said they can log in to their digibank online platform on Thursday morning, many people still cannot make transactions or view past transactions;” Report The Straits Times. By Friday, the problem seemed to have been resolved.

Monitoring action

This was the bank’s worst power outage since 2010. At that time, an internal failure caused DBS Bank’s back-end computer system to go offline, resulting in customers unable to withdraw cash from ATMs within 7 hours.On Wednesday evening, the Central Bank of Singapore and the Financial Regulatory Authority of Singapore Monetary Authority (MAS) stated It will consider taking “supervisory action”.

“This is a serious disturbance and MAS hopes that DBS Bank will conduct a thorough investigation to determine the root cause and implement the necessary remedial measures,” said Mr. Marcus Lim, Assistant Managing Director of MAS Banking and Insurance. “MAS will consider taking appropriate regulatory actions after the investigation. MAS hopes that all financial institutions will have systems and processes in place to ensure consistent financial services to their customers.”

Central Bank regulations stipulate that the total unplanned downtime of critical systems affecting customer service should not exceed 4 hours in any 12-month period. DBS Bank has waived this restriction. Having said that, given that the controlling shareholder of DBS Bank is Temasek Holdings, the country’s second largest sovereign wealth fund, holding 29% of the bank’s shares, it is unlikely that the penalty will be too severe. In other words, the Singapore government, which indirectly controls MAS, is also the most important shareholder of DBS Bank.

Blushed

But for a bank that prides itself on its digital intelligence and the city of Singapore, the power outage is still a serious embarrassment. Has exceeded Global Smart City Index for three consecutive years.

“Embracing the digital world is a strategic imperative of DBS Bank,” wrote In 2015, said John Laurens, the bank’s head of global transaction services. Provide our customers with the latest digital solutions. But, more importantly, we have also invested in our employees. For example, we have more than 400 employees participating in the’hackathon’ to expose them to the digital world and experience first-hand the goals that can be achieved by new forms of rapid product development. “

Five years later, Chng Sok Hui, Chief Financial Officer of DBS Bank, explain In an enthusiastic interview with Mckinsey & Company, everyone’s favorite management consulting company, how DBS has essentially transformed itself from a traditional bank to “becoming a technology company”:

I think we need to understand how to digitize the core, but I think we also need to learn how to change our own way of thinking and organizational culture. We remind ourselves that it is not just the top management, not just the IT staff, nor just the business staff, but everyone.

So we started with many change agenda items. I remember that we have human-centered design thinking. In fact, almost everyone must go through a process of developing an application. I think the other thing we do well is thinking about the customer journey and thinking about the customer.

So it’s not so much an inward process as it is how customers will Actually Experience the application we want to launch. So today, when I look back, I actually saw an awesome cultural change that really happened.

The app stopped working for many DBS Bank customers this week, causing serious disruption to their work, daily life and business operations. “This interruption must have had extensive and possibly significant impacts on many customers. We expect to receive at least notice from the Monetary Authority of Singapore (MAS)” or fines, Business Times Report, To quote the analyst.

Roy Kee, managing director of JRW International, a cleaning product manufacturer: “As a new convertor to e-banking, this will shake my confidence a bit. Banks can also better communicate with customers by sending us text messages about interruptions.”

Global trend?

DBS Bank is not the only major Asian bank whose digital banking services have been disrupted this year. Mizuho, ??one of Japan’s three largest banks, has experienced so many IT system failures — eight so far this year — they could eventually lead to the resignation of the bank’s chief executive Tatsufumi Sakai. Nikkei, Kyodo News and NHK All reported The CEO may step down, but did not disclose their source.

The National Bank of Pakistan (NBP), the third largest bank in Pakistan, suffered a cyber attack in early November, which caused its IT system to be paralyzed throughout the weekend.

Except for Asia, banks in many other regions of the world have suffered widespread power outages and cyber attacks in recent months. This is a quick overview:

• In the past five weeks, almost all major commercial banks in the UK have experienced some form of IT outage.Santander Bank’s apps and online services Go downstairs November 22 lasted for several hours. A week ago, the mobile applications and online banking services of the three major banks, Lloyds Bank, Halifax Bank and Bank of Scotland, belonged to the Lloyds Banking Group. Go downstairs, Leaving thousands of customers in trouble. Two weeks ago, another business giant, Barclays Bank, Suffered a nationwide blackout. A week ago, it was the turn HSBC Bank with Country west.
• In Mexico, the largest bank BBVA So far, there have been 3 system outages in 2021, Two of them happened on Sunday. As a result, the bank’s 24 million customers are not only unable to use the bank’s ATMs, mobile apps, or in-store payments; they can’t even take advantage of its branch services.
• In October, the IT system of Banco Pichincha, the largest bank in Ecuador, Knocked down Been attacked by ransomware for several days.
• In September, Venezuela’s largest bank, Bank of Venezuela, Suffered a large-scale cyber attack This prevented its 16 million customers from using digital banking services for five days. The Venezuelan government blamed the US government for the attack.
• Two of the four largest banks in South Africa, Standard Bank with Absa, Their online banking services have been interrupted many times.
• Kiwibank, one of New Zealand’s largest banks, and ANZ Bank, Australia’s third-largest bank, both suffered a distributed denial of service (DDoS) attack in 2021, resulting in a series of disruptions to IT systems.In the latest Financial Stability Review released in early October, the Reserve Bank of Australia warn A successful cyber attack on a major financial institution is almost inevitable.

This all happens at a time when customers and businesses are increasingly relying on digital payment systems for many reasons, including: the recent astonishing growth of e-commerce, partly due to the Covid-19 blockade; using contactless payments instead of cash* is faster , More convenient spread of Covid-19 The risk of spreading is higher; and it is becoming increasingly difficult to obtain or use cash. This is largely due to the general closure of branches, ATMs and cash withdrawal services by banks.

At my own Spanish bank, Caixabank, most customers Now have to pay two euros Have access to branches to obtain services that they can access online.Bank Already limited cash service In its branches, there are less than three hours a day, from 8:15 am to 11 am. However, as lenders increasingly move customers from branches and physical currencies to online services, the frequency and scale of bank outages, even for highly complex lenders such as DBS Bank, has also triggered flexibility and access to these services. Serious doubts about reliability.

* A lot of research, including from European Central Bank with Bank of England, Indicating that the risk of using cash to spread Covid-19 is extremely low.