Japan's Mizuho Bank may be penalized for system outage

Summary:Bank faces potential disciplinary action from regulatory body after suffering network and service outages, which it blames on increased deposit activities after country's massive earthquake.

Mizuho Bank may face disciplinary action from Japan's Financial Services Agency (FSA) following its system glitch last week, which affected over 1 million cash transfer orders nation-wide.

According to reports by The Wall Street Journal (WSJ), the breakdown which started Tuesday caused several customer inconveniences, including a delay in salary payments. On Thursday, 1,600 ATMs (auto teller machines) and online banking services also crashed, though, these were restored after a few hours.

The bank blamed the system outage on excessive deposit following the earthquake, but said it was still working to determine the cause of the failure.

The report said the industry's regulatory body, FSA, may discipline Mizuho Bank for the wide-scale outage, but did not elaborate further as authorities "were not immediately available for comment".

The Japanese bank reportedly held talks with competitors Sumitomo Mitsui Banking and Bank of Tokyo-Mitsubishi UFJ on Sunday to discuss the possibility of sharing its processing load, as part of its efforts to address a prolonged system failure. As of Sunday, Mizuho still had 890,000 unprocessed payments.

The WSJ article said all of the banks 38,000 ATMs would be shut down between Saturday and Monday to speed up system recovery. The bank also extended operating hours at all its 440 branches over the three days to serve account holders whose salary payments had been delayed by the outage.

The Daily Yomuri confirmed via Twitter that some banking services and a number of ATMs will remain unavailable tomorrow, with no indication on when these will be restored.

While other Japanese banks did not experience similar outages in the quake's aftermath, many have had to switch off ATMs due to power blackouts and to conserve energy use.

Last week's incident was Mizuho's "most serious" since 2002, where system outages caused delays in processing 2.5 million public utility payments and other account settlements, according to WSJ.

Topics: IT Employment, Banking

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