The Financial Services Agency (FSA) in Japan has ordered Mizuho Bank to solve technical problems after glitches exposed failings at the country’s third-largest lender despite $3.6 billion in upgrades.
Mizuho Bank did not reveal its Information Technology Partners.
“I can’t think of any other cases where the FSA has become so closely involved in inspections of a banks’ computer system,” said Brian Waterhouse, senior bank analyst of Windamee Research, who publishes on the Smartkarma platform.
The FSA will communicate with Mizuho Bank on the running of its computers, officials said at a briefing, though 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.
“Mizuho will submit reports with what’s needed to be done to us and we will point out if changes are needed,” an FSA official told a media briefing, adding that there would be ongoing conversations with the bank.
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.
Mizuho said in a statement it took the regulator’s punishment seriously and reassess the need for scheduled system upgrades and updates.
Mizuho Bank said its top priority is the stable operation of IT system, and “we will do all in our power to ensure upgrades and updates proceed steadily and securely.”
The regulator’s next actions will depend on the outcome of a report from the bank, which is due by Oct. 29.