Japanese regulator steps in to correct Mizuho’s IT flaws

A pedestrian is reflected in a sign showing the logo of Japanese group Mizuho Financial Group Inc in front of the bank’s headquarters in Tokyo, Japan on May 15, 2015. REUTERS / Yuya Shino

  • FSA to play role in helping Mizuho with system
  • Technical issues persisted despite the overhaul
  • The regulator will not directly manage the technological system

TOKYO, Sept.22 (Reuters) – Japan’s banking regulator to play role in monitoring IT systems at retail banking arm of Mizuho Financial Group (8411.T) after problems rocked the country’s third-largest lender despite to the level of 3.6 billion dollars.

The unusual move by the Financial Services Agency reflects deep regulatory concern over the deep-rooted technical issues of Mizuho Bank, which the FSA has ordered to improve its business.

The FSA will communicate with Mizuho Bank on the operation of its computers, officials said at a briefing, although the regulator has not taken over the direct management of the bank’s systems after a series of technical collapses this year.

These included widespread ATM outages, causing frustration among customers and undermining confidence in Mizuho Bank.

The problems are all the more noticeable as Mizuho spent more than $ 3.6 billion to overhaul its systems in 2019 following two large-scale outages in 2002 and 2011.

A third-party report commissioned by the bank found that its corporate culture was to blame for failures in its technology system, creating an atmosphere in which managers are reluctant to voice their opinions and unable to respond well to crises. Read more

Mizuho said in a statement that he is taking the regulator’s sanction seriously and reassessing the need for scheduled system upgrades and updates.

“Our top priority is the stable operation of our IT system, and we will do everything in our power to ensure that upgrades and updates run smoothly and securely,” he said. .

“All of our employees will continue to work together to achieve this goal.”

The regulator’s next actions will depend on the outcome of a bank report, due by October 29 at the latest.

Reporting by Yuki Nitta and Junko Fujita; Written by Ritsuko Ando and David Dolan; Editing by Stephen Coates and Alexander Smith

Our Standards: Thomson Reuters Trust Principles.

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