Japan regulator steps in to fix Mizuho’s computer flaws

TOKYO, Sept 22 (Reuters) – Japan’s banking regulator will take a role in oversight of computer systems at the retail banking arm of Mizuho Financial Group (8411.T) after glitches that shook the country’s third-largest lender despite $3.6 billion in upgrades.

The Financial Services Agency’s unusual move reflects the deep regulatory concern over deep-rooted technical problems at Mizuho Bank, which the FSA ordered to improve its business.

The FSA will communicate with Mizuho Bank on the running of its computers, officials said at a briefing, although the regulator stopped short of taking on direct management of the bank’s systems after a series of technical meltdowns this year.

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

The problems are all the more notable given that Mizuho spent more than $3.6 billion to overhaul its systems in 2019 following two large-scale breakdowns in 2002 and 2011.

A third-party report commissioned by the bank found its corporate culture was to blame for its tech system failures, creating an atmosphere where managers are reluctant to express opinions and unable to respond well to crises. read more

Mizuho said in a statement it took the regulator’s punishment seriously and reassess the need for scheduled system upgrades and updates.

“Our top priority is the stable operation of our IT system, and we will do all in our power to ensure upgrades and updates proceed steadily and securely,” it said.

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

The regulator’s next actions will depend on the outcome of a report from the bank, which is due by Oct. 29.

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

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