ATM crashes reveal Mizuho Bank lacked customer-focused approach

The widespread damage caused by a series of computer system failures can be attributed to lax crisis management. Mizuho Bank must change a corporate culture that has disregarded customers and do all it can to regain their trust.

Mizuho Financial Group Inc. has compiled a report on the causes of four computer system glitches since the end of February at subsidiary Mizuho Bank, and measures to prevent recurrences of similar glitches.

Mizuho Financial Group President Tatsufumi Sakai apologized at a press conference, saying, “There were various problems not only in the system itself but also in the development and operation of the system.”

In a serious glitch on Feb. 28 that put the bank’s about 4,300 automated teller machines out of service, there were about 5,200 cases of customers being unable to retrieve their passbooks or cash cards from the machines. Many customers were forced to wait at branches for a long time.

The bank should seriously reflect on the fact that it neglected customer service.

According to the report, the bank prioritized gathering information on the cause of the problem in its initial response. It has been said that the bank was slow to grasp the entire picture of the problem and give instructions to its branches.

The bank’s staff were slow to get to the branches because the bank did not have the necessary procedures in place to deal with a large-scale ATM failure on a holiday or at night.

The report also stated that there was a lack of coordination between the sections that handle inquiries and operate ATMs.

It must be said that the bank lacked a customer-focused approach, which the Financial Services Agency has strongly urged financial institutions to adopt.

Mizuho Bank intends to change its specifications so that cash cards and passbooks can be returned in principle in the event of a failure, and take thorough measures to collect information through social media and other means. The bank should take all possible steps to prevent customers from being inconvenienced in the event of glitches.

The operation of their systems also needs to be reexamined.

Mizuho Bank experienced large-scale system failures in 2002 and 2011. Based on the lessons learned from the failures, the bank completely revamped its core system in 2019.

Since then, however, the bank has reduced the number of specialized personnel in charge of system management, and also scaled back full-time support by the company that developed the system, according to the report.

The work does not end when a system is built. The stability of the system is the most important thing. If the priority was to cut costs, it is hard to understand.

The bank should make thorough preparations by improving the structure and personnel arrangements that ensure secure management, and conducting drills regularly.

Mizuho Financial Group submitted the report to the FSA. The agency needs to examine such issues as whether the measures to prevent a recurrence of similar glitches are sufficient and whether there are problems and management responsibilities common to the four failures. The FSA must take strict action, including consideration of administrative penalties.

— The original Japanese article appeared in The Yomiuri Shimbun on April 9, 2021.