Mizuho Bank’s poor handling of latest system glitch must not be repeated

Another system failure has occurred at Mizuho Bank, which has experienced major system problems in the past. The bank must determine the cause of the glitch as soon as possible and take all possible measures to prevent a recurrence and regain public trust.

On Feb. 28, users of Mizuho Bank’s automated teller machines were unable to withdraw money and receive other services due to a system problem. At one point, about 4,300 ATMs — approximately 80% of the bank’s ATMs nationwide — were out of action.

Internet banking was also affected and some transactions were disrupted. All ATMs in the bank’s branches were back in operation on the morning of March 1, the following day, but full restoration in sub-branches was delayed until the afternoon.

Bank systems and ATMs are important parts of an infrastructure that supports people’s livelihoods. A situation must not occur in which repeated problems cause inconvenience to users.

The Financial Services Agency intends to issue an order to report on the cause of the problem and measures to prevent its recurrence. The bank said that the failure occurred because there was insufficient capacity in the system for the migration of data on fixed deposit transactions. However, it is essential to thoroughly investigate why its estimates concerning capacity had been overly optimistic.

Many customers were reportedly held up for several hours at branches because they could not retrieve cash cards and passbooks from ATMs that had been shut down.

Wasn’t there a system in place for bank employees to react quickly and take care of the situation? The bank plans to contact customers and return their cards and passbooks that had not been retrieved. However, the inconvenience caused to customers who entrust their precious savings to the bank must have been great.

Mizuho Bank also needs to thoroughly examine how it deals with customers in the event of problems and make improvements.

Major system failures took place when Mizuho Bank was inaugurated in 2002 through the integration of Dai-Ichi Kangyo Bank, Fuji Bank and the Industrial Bank of Japan, and immediately after the 2011 Great East Japan Earthquake.

The bank was subject to strong criticism for the major system glitches, which included double withdrawals in 2002 and a problem affecting payroll transfers in 2011.

The complexity of the system due to management integration was said to be a contributing factor, so a completely revamped system was launched in July 2019 that cost about ¥450 billion and took about eight years to develop. The fact that a failure occurred less than two years later is a serious matter.

There are also many problems in terms of accountability after the latest system failure. Mizuho Bank posted a letter of apology on its website on Feb. 28, but it did not reveal the status of the suspended ATMs and other services until late in the evening. A press conference was held at 6 p.m. on March 1. The response was too slow.

Banks bear a heavy social responsibility. It is essential for Mizuho Bank to promptly explain the situation surrounding the system glitch to customers to alleviate their concerns. It should also clarify its management responsibilities.

— The original Japanese article appeared in The Yomiuri Shimbun on March 2, 2021.