SINGAPORE - DBS Bank may suffer some damage to its reputation and credibility as a result of the extended disruption to its services this week, but the impact is likely to be limited, said experts and observers on Thursday (Nov 25).
But they added that banks in general need to implement more safety nets to improve reliability, especially given the increasing use of technology and reliance on digital infrastructure in the financial sector.
Problems with the DBS website and mobile app prevented customers from accessing banking services for about two days from Tuesday.
While the bank said its services were returning to normal on Wednesday night, some customers continued to report issues on Thursday.
On Thursday, DBS advised those still facing issues to restart their devices and clear their browser cache before attempting to log in again.
Associate Professor Anand Srinivasan, who heads the finance department at the National University of Singapore (NUS) Business School, noted that DBS was recently named the World's Best Bank by British publication Euromoney for the fourth consecutive year.
He said this award is based on many factors, particularly the safety and soundness of its lending operations and customer deposits.
In this regard, DBS "continues to shine" and the recent disruption is likely to have minimal effects on its global reputation, he added.
Assistant Professor of Finance Aurobindo Ghosh from the Singapore Management University's Lee Kong Chian School of Business said the disruption, while "very distressing", should be viewed in the context of the bank's digital transformation as a whole.
He said DBS deserves the accolades it had received as it has been "at the forefront of digital transformation" in Singapore's financial services sector over the past decade and has launched many new and innovative digital financial products.
"Singaporeans are used to a high level of service. As an international bank, there could be some damage to the image and reputation of DBS as the main, and sometimes only, go-to option."
Prof Ghosh said there is a significant portion of Singaporeans who are underbanked - meaning they lack full access to mainstream financial services - and are unsure about adopting digital financial products.
"Disruptions tend to stick in the memory of those who were reluctant to begin with, so DBS must try to win back those clients and not lose the clients they already have," he added.
Experts from cyber-protection firm Acronis said the disruption could have been due to human error in a routine process such as maintenance or system upgrading.
DBS country manager for Singapore Shee Tse Koon had said on Wednesday that the issue was due to a problem with the bank's access control servers, but did not elaborate on the details.
On Thursday night, DBS said its systems remain secure and were not the target of a cyber attack.
Access control servers handle both login and payment verification using means such as biometrics, authentication tokens and one-time passwords.
Acronis chief information security officer Kevin Reed said authentication is one of the core components of Internet banking and banks rarely outsource this critical function.
“DBS hasn’t shared much information about what happened, and the reason could be that they still don’t know what the issue is exactly,” he said.
"It's hard to tell, but a system upgrade or some external event could be causing a significant overload of the authentication platform, leading to its malfunctioning."
Mr Feixiang He, adversary intelligence research lead at cyber-security firm Group-IB, said modern financial systems are very complex and it can be implausible or impossible for banks to build everything in-house.
The increasing complexity of financial systems is accompanied by greater risks of cyber attacks and supply chain disruptions, he noted.
This presents challenges not only for cyber security but also in managing system changes and engineering site reliability.
“Such delicate ecosystems require close partnership among various organisations so that the fundamental principles of confidentiality, integrity, and availability are met,” Mr He said.
Glitches can be introduced when system configuration changes are made or new software is introduced, he said. In such cases, having proper backup and rollback mechanisms in place can help organisations recover swiftly.
Prof Srinivasan said tech glitches often arise from outside the organisation and will become problematic only if there is a repeated pattern.
"I believe that the true usefulness of tech in banking for customers is not determined by large systemwide failures, but rather in its reliability for day-to-day usage.
"In this dimension, DBS, like most other Singapore banks, scores well," he added.