SingTel fire: banks look for answers, not damages

PHOTO: SingTel fire: banks look for answers, not damages

SINGAPORE - Even as SingTel launches an independent board committee of inquiry to look into last week's fire, two banks - DBS and OCBC - will not be seeking compensation for the resulting service disruptions.

According to OCBC's head of group technology services, Eugene Lau, no compensation is being sought as the impact on OCBC was minimal, because of how the bank has designed its network.

UOB, which had two branches affected by the service disruption last week, declined to comment on the matter of compensation yesterday.

While OCBC is not looking for money, it still wants some answers.

"I want to understand the fire - why it took 20 minutes (to extinguish) and not less. I want to learn from that," said Mr Lau. "I've been in touch with the SingTel partners to make sure we're in the loop (on) their findings."

The cause of the fire remains under investigation.

DBS, too, had previously said that it was working with SingTel to find out why the network contingency plan did not work for some of its branches.

Of the three local banks affected last Wednesday, OCBC was the only one with unaffected branches, while services for 11 of its 600-odd ATMs were disrupted. DBS was the hardest hit, with some ATMs and 18 of its branches seeing disruptions.

DBS said yesterday that only a "small proportion" of its ATMs, cash acceptance machines and branches were affected because all its branches have "dual network connectivity", while its machines are connected in a way that prevents a network incident from affecting all the others in the area.

For a 30-minute spell yesterday, DBS and POSB customers had difficulties using some of the bank's ATMs, which DBS chalked up to a "system connectivity issue" that was not related to the Bukit Panjang fire.

Yesterday, OCBC said its branches were unscathed by the fire because each branch is supported by two different exchanges. Also, its Bukit Panjang branch's main line is connected to SingTel's Jurong West exchange, rendering the fire a moot issue.

This level of contingency planning can be costly. When OCBC upgraded its network's backup systems in 2010, it ended up spending $600,000 as a one-time investment, and paying $35,000 more in monthly maintenance costs for the additional network lines and connections to more exchanges, it said yesterday.

Today, the bank spends more than $100,000 a month on maintenance for the ATM and branch network lines alone.

While some of OCBC's ATMs are also connected to two different exchanges, other OCBC ATMs rely on just one. This was the case for 11 of the bank's machines which experienced outages after the SingTel fire, as their primary and backup network lines were both connected to the Bukit Panjang exchange.

OCBC's Mr Lau said that when the bank's ATMs follow the one-exchange configuration, it is because there are other OCBC ATMs located nearby that are connected to other exchanges. The 11 affected ATMs, for example, were spread out across the island, in places such as Woodlands and Changi Airport.

"We are talking about looking (again) at this approach, (at) whether there is more that we can do," Mr Lau said.

Yesterday, SingTel outlined its plans for its newly formed committee of inquiry. It will focus on four areas: the cause of the fire; how effectively the telco handled the incident; a comparison of its network design and contingency processes with global standards; and recommendations to prevent similar events and improve network resilience.

The three-member committee will be chaired by Bobby Chin Yoke Choong, a non-executive and independent director of SingTel and chairman of its risk committee. He was previously the managing partner of KPMG Singapore.


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