Mizuho's corporate culture to be blamed for serial system failures, probe finds
17 June, 2021
Mizuho Financial Group Inc's corporate culture is to be blamed for its long history of tech system failures, creating an atmosphere where managers are reluctant expressing opinions and struggling to respond well to crises, a study found.
The damning report was commissioned by Japan's third-largest lender after four system breakdowns between February and March this season, which came despite the bank having spent a lot more than $3.6 billion to overhaul its systems in 2019. That revamp followed two large-scale breakdowns in 2002 and 2011.
The third-party report said Mizuho rotated tech staff all too often which prevented the accumulation of knowledge and that managers were too hesitant to question the status quo.
"The atmosphere within the business is one where managers believe the very best course is to take the stance that they have done what they are supposed do instead of taking the risk of actively expressing their opinion. This contributes to too little positive and proactive action on their part," the report said.
A decade ago when Mizuho reported system failures, the country's financial watchdog told the lender there is a problem using its culture.
"Our corporate culture hasn't remained the same, but it is also true it could not easily change," LEADER Tatsufumi Sakai told a press conference on Tuesday.
One of the glitches this season affected almost all of its ATMs, leaving customers struggling to retrieve thousands of charge cards and bank books stuck inside in the machines.
"I found know the ATMs breakdown through internet news," Koji Fujiwara, the top of Mizuho's main banking unit, told reporters, highlighting how Mizuho was slow to talk about information using its management.
Mizuho said it could set up an internal committee to avoid recurrences and plans to recruit executives from tech companies to boost know-how.
Sakai will have his pay halved for six months to take responsibility for the problems, while Fujiwara will take a 50% pay cut for four months.
"We, all together organization, strongly recognize it's necessary to take fundamental preventive measures in order not to let such issues happen again," Mizuho said in a statement.
Mizuho didn't, however, announce Fujiwara's resignation which had been flagged by domestic media.
The report was published by a four member team led by legal professional Shuji Iwamura and in addition including another lawyer, a former Fair Trade Commission official and a former NTT DoCoMo executive.
Mizuho's shares closed up 0.4%.
Source: japantoday.com
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