Japan’s banking regulator would oversee system management at Mizuho Financial Group Inc, a rare punishment following a series of technical failures at the banking group, a source told Reuters yesterday.
The Japanese Financial Services Agency’s move is due to be part of administrative action against retail lender Mizuho Bank Ltd and its parent, Japan’s third-largest lender by assets, the source said on condition of anonymity.
A spokesperson for Mizuho declined to comment.
The action by the agency — one of the most decisive in recent memory — would bring the computer system of the retail arm of the Japanese banking giant under effective government control.
It comes after a series of high-profile technical meltdowns this year, including widespread outages at ATMs, that had frustrated customers and undermined confidence in the lender.
The technical problems are all the more notable given that Mizuho spent more than US$3.6 billion to overhaul its systems in 2019. That revamp followed two large-scale breakdowns in 2002 and 2011.
Japanese Chief Cabinet Secretary Katsunobu Kato declined to comment directly on reports of the action against Mizuho, but said banks themselves must be responsible for building systems to provide financial services.
A third-party report commissioned by the bank found its corporate culture was to blame for its long history of tech system failures, creating an atmosphere where managers are reluctant to express opinions and unable to respond well to crises.
The Nikkei Shimbun, which first reported the agency’s planned move, said the regulator would jointly manage the system with the bank, and order that system updates and maintenance be carried out under its control.
The management structure of the system might also be reviewed if necessary, the Nikkei said.
The regulator would determine where management responsibility lies after clarifying the cause of Mizuho’s recent technical problems, it said.
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