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MAS Warns Financial Institutions to Prep for Risks

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DigitalCFO Newsroom | 13 June 2022

Singapore’s central bank issues tighter guidelines for financial institutions facing potential business disruptions.

The Monetary Authority of Singapore (MAS) has revised its directions for financial institutions when handling service disruptions, by issuing a fresh set of business continuity management (BCM) guidelines on Monday.

Among other things, the new guidelines take both the impact of the Covid-19 pandemic and increased digitalization into account, the MAS said.

Operational disruptions, if not recovered speedily, may compromise the ability of financial institutions (FIs) to meet their business obligations, resulting in financial and reputational damage, as well as inconvenience to customers,» the MAS said in the guidelines. Given that FIs are highly interconnected, severe disruptions may have a broader contagion effect on the financial system.

Recent Disruptions

The tighter guidelines come hard on the heels of recent disruptions at all three of Singapore’s banks. In February, the MAS required DBS to set aside additional regulatory capital after a serious digital banking failure last year. That same month, UOB suffered extensive disruptions to its ATMs and mobile app. Beyond that, OCBC was required to hold more capital after it was criticized for its slow response to a surge in sophisticated scams that targeted customers late last year.

Under the new guidelines, the institutions are expected to identify their critical business services to prioritize their recovery, as well as determine recovery strategies and asset allocation, the guidelines said. They will also need to establish a service recovery time, and mitigate concentration risks. As part of this, they need to regularly test their BCM framework and participate in industry and cross-sector exercises organized by government agencies and industry associations.


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