The last time UOB saw its digital services disrupted was in February 2022. The disruption lasted for several hours and was only resolved “in the early hours” of the next day. At the time, the bank revealed that the disruption was not due to a cyberattack or breach and that its system remained “secure”.
In comparison, fellow local lender DBS Bank experienced several service outages, with five disruptions just this year alone. One of its more recent outages took place on Oct 14, when its customers, as well as Citibank’s customers, experienced issues accessing banking services. Services by both banks were fully restored the next day.
The outage was said to be caused by a technical error at an Equinix data centre used by the lenders. Equinix subsequently said that the outage was caused by a vendor contractor’s mistake. This created a technical issue with its chilled water system which caused some of the data centre’s halls to overheat and subsequently affected the operations of its tenants.
With digital banking on the rise and Singapore’s plan to go cashless, it is imperative that banks have a defensive digital strategy in mind.
For UOB, one of these strategies includes owning its data centres instead of relying on third-party vendors. The bank has owned a data centre for some 20 years. It is also building another. “When you outsource, it can be difficult to control sometimes,” says Wee Ee Cheong, the bank’s deputy chairman and CEO at its 3QFY2023 ended September results briefing on Oct 26.
For UOB, having a stable system is important. “Technology, as you know, can break down [at any time] and we have to be prepared for it,” says Wee. “This is why ... we centralise a lot of our technology. We don’t outsource [our systems] so that we are in better control of the situation,” he adds.
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UOB’s CFO Lee Wai Fai highlighted that the bank is focused on resiliency and security. It is for this reason that the bank has a central system and does its data processing in-house.
The bank takes it a step further by stress testing situations such as simulating cyberattacks on its systems and exploring recovery scenarios focused on restoring its systems in the quickest time possible and with minimal disruptions. “We will continue to look at that, and make sure that we continue to invest [in these systems],” he shares.
On comments that UOB is “slower to react” and that it is not an open architecture, Lee says: “We are a commercial bank looking at long-term stability.”
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“This is why we ensure that our entire technology is standardised so we can replicate some of the best practices. We first roll it out in Singapore and then we replicate it in the rest of the [markets that we’re in]. The speed to market again is very important ... We want to [work on] responsible innovations,” Wee stresses.
In April, the bank announced that it will be investing over $500 million to build its new global technology and innovation centre in JTC’s Punggol Digital District.
The centre, which is slated to be ready in 2026, will be the “cradle of ideation, development and piloting of UOB’s latest solutions”. The centre will also be home to UOB TMRW and FinLab, an innovation accelerator that connects businesses to drive growth and transformation in digitalisation and sustainability across the region.
