Mizuho’s corporate culture is behind repeated system crashes, survey finds

The logo of Mizuho Financial Group is seen at the company’s headquarters in Tokyo, Japan on August 20, 2018. REUTERS / Toru Hanai

The corporate culture of Mizuho Financial Group Inc (8411.T) is the root cause of its long history of system failures, as it is not able to respond well to crises, lack of technological expertise and no has not progressed, a third-party investigation revealed.

The damning report commissioned by Japan’s third-largest lender comes after four system outages between February and March this year, despite the bank spending more than $ 3.6 billion to revamp its systems in 2019. The overhaul has follows two large-scale blackouts in 2002 and 2011.

One of the issues this year has affected most of its ATMs, preventing customers from retrieving thousands of bank cards and passbooks stuck inside the machines.

Mizuho said in a statement on Tuesday that he would set up an internal committee to prevent recurrence and is considering recruiting executives from tech companies to improve know-how.

Managing Director Tatsufumi Sakai will see his salary cut in half for six months to take responsibility for the issues while Koji Fujiwara, the head of Mizuho’s main banking unit, will suffer a 50% pay cut for four months.

“We, across the organization, strongly recognize that it is necessary to take fundamental preventive measures so as not to allow such problems to reoccur,” Mizuho said in a statement.

Mizuho, ​​however, did not announce Fujiwara’s resignation which had been reported by national media.

A press conference will be held from 5:00 p.m. Tokyo time (0800 GMT).

The report said Mizuho rotated technical staff too often, preventing knowledge build-up and managers were too reluctant to question the status quo.

“The atmosphere within the company is one where managers believe that the best solution is to take the position that they have done what they are supposed to do rather than taking the risk of actively expressing their opinion. This contributes to a lack of positive and proactive action on their part, ”the report says.

The report was compiled by a four-member team led by lawyer Shuji Iwamura and included another lawyer, a former Fair Trade Commission official and a former NTT DoCoMo executive.

Mizuho shares closed up 0.4%.

($ 1 = 110.0700 yen)

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