Managing credit and market risks in a volatile market

2025 saw US tariff volatility, retaliatory measures, and accelerated investment in AI technologies. Moderate inflation and rate cuts, coupled with fiscal spending funded by sovereign debt, kept global growth more resilient than expected.

AI-linked asset valuations raised concerns of a potential correction, particularly for speculative investments. High-debt countries as well as leveraged households and corporates, faced potential economic and financial stress respectively. Global real estate sectors, especially in Hong Kong and China, continued to encounter headwinds, oversupply in some segments and refinancing challenges.

Geopolitical tensions between US and China, and conflicts in Europe and the Middle East amplified macroeconomic uncertainties and heightened market volatility.

Amidst these challenges, we monitored economic shocks, geopolitical tensions and sector vulnerabilities through a risk scenario planning framework with established early warning triggers for risk mitigation actions. Reviews and stress tests were conducted to maintain vigilance on our credit portfolio and our portfolio of traded instruments. Analyses revealed no material concerns, re-affirming the robustness of our risk management framework.

Credit quality stayed strong, with the NPL rate at 1.0% and specific allowances at SGD 854 million.

In 2025, we maintained a prudent approach to our Hong Kong and China real estate portfolios. We also tightened onboarding, collections and risk triggers across SME and consumer unsecured portfolios. Unsecured consumer loan exposure remained below 2% of Group exposures. Residential mortgages were largely owner-occupied with low loan-to-value ratios.

Strengthening liquidity resiliency

Strengthening the bank’s liquidity profile and resilience remained central to our risk management agenda in 2025. We deepened our USD liquidity buffers by diversifying funding sources and growing our USD liquid asset reserves. We refined our liquidity risk management framework and enhanced concentration and outflow risk measures amidst a fast-moving market. These actions collectively enhanced our resilience and responsiveness to potential stress events.

Strengthening financial crime controls and customer protection

In 2025, we achieved a 35% increase in scam saves and were the first to implement the full scope of surveillance duties under the MAS Shared Responsibility Framework, with a focus on protecting elderly customers. We introduced time-bound controls for credit card provisioning to mobile wallets, which reduced related scam cases by 98%. We also enhanced cognitive breaks in payment journeys to raise scam awareness. To prevent misuse of accounts, we strengthened AI/ ML models to detect scam mules and collaborated with law enforcement to recover proceeds. We also uplifted our Source of Wealth (SOW) due diligence framework and extended AI/ ML monitoring to retail banking, which improved detection of bad actors by 175%. Our contributions to the MAS Anti-Money Laundering (AML)/ Countering Financing of Terrorism Industry Partnership SOW Best Practices Paper reflected our leadership in industry collaboration. We continued to combat money laundering, sanctions and export control risks by enhancing macro payment flow surveillance and training staff to identify evasion attempts.

Fair dealing remained central to our organisation. Sales processes for corporates and complaints management processes across all consumer segments were enhanced, further reinforcing our commitment to fair dealing and responsible business conduct across all our markets.

Read more about “Preventing Financial Crime” in the Sustainability Report.

Embedding resilience, governance and a strong risk culture in technology

We improved service availability and service recovery, with a focus on resiliency and security across all our core markets. We also enhanced disaster recovery, end-to-end service monitoring and incident management. We will continue to improve on these key areas in 2026.

As part of our ongoing uplift of technology risk management and governance, we placed significant focus on strengthening controls to safeguard our production environment and ensure continued resiliency and protection of customer data. Our technology risk culture programme also continues to reinforce a resilient risk mindset and desirable behaviours.

Read more in the CIO statement.

Navigating the evolving cyber threat landscape

We continued to observe an increase in the sophistication and frequency of cybersecurity threats, with new threats originating from nation-state actors and highly organised criminal enterprises. We remained vigilant in safeguarding our critical information infrastructure, sensitive data, and the trust of our customers and employees. Our cybersecurity strategy, anchored in an intelligence-driven, multi-layered defence approach, continues to be guided by the principles of zero trust and assumed breach with rigorous attack simulation and testing.

We minimised cyber-related vulnerabilities through a multi-layered network design with vendor diversification, enhanced cyber threat monitoring, automated response capabilities and the adoption of leading security technologies.

In 2025, we enhanced our capabilities through upgraded monitoring tools, streamlined response workflows and strengthened threat detection. Moving forward, we will continue to invest in advanced analytics, automation and proactive strategies to ensure resilience and readiness against emerging cyber threats.

Our commitment extended beyond internal measures to vital industry collaborations, including the Association of Banks in Singapore Standing Committee on Cyber Security and the Financial Services Information Sharing and Analysis Centre. These collaborations facilitated proactive threat intelligence sharing and the collective development of best practices across the financial sector.

Advancing risk management with Gen AI, data and AI governance

Gen AI remained a key priority to enhancing effectiveness and productivity, unlocking sharper risk insights, and transforming operating models in DBS. In 2025, we focused on deepening capabilities, scaling deployment and driving adoption of Gen AI across risk management.

We enhanced our collection capabilities by leveraging Gen AI to assist our employees in their conversations with customers. This included summarising the conversations, collating information to facilitate employees to achieve better outcomes, and conducting quality assurance on call transcripts for employee coaching. We also improved employee efficiency in performing credit evaluation by using Gen AI in the extraction and validation of information. Moving beyond discrete Gen AI use cases, we are also progressing toward implementing agentic workflows such as generating credit evaluation memos for review by staff.

With the continued adoption of AI, including Gen AI and Agentic AI solutions across the bank, we also strengthened the risk oversight on AI governance. Governance enhancements, including oversight committees and frameworks, ensure responsible data and AI usage across the lifecycle.

Strengthening governance and controls over third party risk management

We strengthened our third party risk management and governance, particularly for service providers with access to customer data. This included implementing enhanced security requirements for data transmission and server environments, with controls that are commensurate with the type of information shared with the service providers. We also implemented periodic risk reviews to evaluate service providers’ capabilities in maintaining service continuity and adherence to the bank’s control requirements, such as information and physical security.

Managing digital asset risks

With the expansion of our digital asset ecosystem, the bank remained focused on managing the associated key risks. This included navigating evolving regulatory requirements and enforcing robust Know Your Client/ AML compliance, particularly for identifying token holders on public blockchains. We prioritised technology and data security by addressing network integrity, transaction immutability, data sovereignty and privacy concerns. The bank also monitored industry perspectives on monetary stability and commercial viability, upholding rigorous compliance, secure technology and strong governance to safeguard customer interests. We managed the market and liquidity risks associated with crypto assets through a comprehensive framework that included regulatory compliance, internal limits and robust monitoring and control processes.

Advancing climate risk management capabilities

In 2025, we strengthened our governance on climate risk management through the Group Climate Council which improved senior management oversight over the execution of our climate strategy, and by enhancing our framework for transition risk financing. We continued to enhance our capabilities on assessing climate physical risk by leveraging geolocation data from our internally-built climate risk data mart to generate more precise physical risk assessments that provided insights on the location-specific nature of physical risk perils, such as flooding and heat waves. On the emerging area of nature risk, we published a report jointly with peer banks and academia on a nature-related financial risk pilot project facilitated by MAS. Insights from this initiative will be used to enhance the bank’s analysis of nature-related dependency and associated risks.

Read more about “Responsible Financing” in the Sustainability Report.