Mizuho Bank cannot afford to make any more mistakes after latest glitches

System failures at Mizuho Bank have led to a series of problems for its automated teller machines and online banking.

After a large-scale problem on Feb. 28 put about 80% of the bank’s ATMs nationwide out of service, with some customers unable to retrieve their passbooks or cash cards from the machines, Mizuho faced another problem on the night of March 3 that disrupted 29 ATMs in Tokyo, Chiba Prefecture and elsewhere for up to three hours.

Once again, there were cases of cash cards remaining stuck in the machines. The bank said the cause was a network shutdown due to equipment trouble.

Then on March 7 as well, there was a glitch that made it impossible to make time deposits through ATMs or online banking. According to the bank, the problem occurred while updating a computer program.

Although there is no connection between each failure, it is abnormal that such problems occurred three times in about a week. Customer anxiety is only growing stronger.

Banks are an important infrastructure that supports our livelihoods. At the heart of a bank is its system, the stability of which is of the utmost importance.

The frequency of Mizuho Bank’s system failures is noticeably high among the three megabanks. The bank needs to thoroughly investigate the cause and take drastic preventive measures.

It was also revealed that the large-scale failure at the end of February occurred in the process of shifting data to digital accounts so that records of deposits and withdrawals can be checked online rather than through printed passbooks.

The bank started offering these digital accounts in January, with accounts that have not had any entries for a year or more as of the end of January each year automatically converted into digital ones. The bank explained that as it was conducting account classification at the end of the month when data processing is heavy, there was not enough memory in its system, causing the breakdown.

The digitization is aimed at reducing costs for printed passbooks and streamlining clerical work, according to the bank. But the burden of this streamlining must not extend to customers. Suspending the work to convert data into digital accounts was a matter of course.

Mizuho Bank, formed from the reorganization of Dai-Ichi Kangyo Bank, Fuji Bank and the Industrial Bank of Japan, has been slow in integrating its systems and has also been lagging behind other banks in terms of introducing digital accounts.

In response to a complete renewal of its system in summer 2019, Mizuho Bank is believed to have tried to catch up to other banks at once. The bank seems to have failed to pay enough attention to security as it rushed to deal with its predicament.

At a press conference on March 1, Mizuho Bank did not make clear that its transition to digital accounts was the cause of the first large-scale failure. Accountability in its explanations is also a serious problem.

It has been pointed out that Mizuho Bank after its merger lacked a sense of unity as it had not been able to sufficiently integrate the three former banks’ organizations. The bank also needs to examine whether this is an underlying cause of the series of troubles.

— The original Japanese article appeared in The Yomiuri Shimbun on March 10, 2021.