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Mizuho Financial Group Inc’s corporate culture is to blame for its long history of failures in technological systems, creating an atmosphere where managers are reluctant to voice their opinions and unable to respond well to crises, a survey found. The damning report was commissioned by Japan’s third-largest lender after four system outages between February and March this year, despite the bank spending more than $ 3.6 billion to overhaul its systems in 2019. This overhaul follows two large-scale blackouts in 2002 and 2011.
The third-party 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 think 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.
Ten years ago, when Mizuho reported system failures, the country’s financial watchdog told the bank there was a problem with his culture. “Our corporate culture has not remained the same, but it is also true that it will not change easily,” Managing Director Tatsufumi Sakai said at a press conference on Tuesday.
One of the issues this year has affected most of its ATMs, preventing customers from recovering thousands of bank cards and bank books stuck inside ATMs. “I learned about the ATM outage from information on the Internet,” Koji Fujiwara, head of Mizuho’s main banking unit, told reporters, noting how slow Mizuho was to share information with his management.
Mizuho has said he will set up an internal committee to prevent recurrence and is considering recruiting executives from tech companies to improve know-how. Sakai will see his salary cut in half for six months to take responsibility for the issues, while Fujiwara 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.
The report was compiled by a four-member team led by lawyer Shuji Iwamura and also including another lawyer, a former official of the Fair Trade Commission and a former executive of NTT DoCoMo. Mizuho shares closed up 0.4%.
($ 1 = 110.0700 yen)
(This story was not edited by Devdiscourse staff and is auto-generated from a syndicated feed.)
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