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Japan bank computer glitch causes chaos

By Kuriko Miyake

(IDG) -- When three of Japan's major banks were reorganized to form the world's biggest bank, it was almost certain some IT problems would occur. However, who could've imagined the conflicts between the bank's computer systems would cause six days of chaos involving over 30,000 transaction errors and 2.5 million delayed debits? Yet that is what happened to Mizuho Holding Inc. when it reorganized its subsidiaries into two new banks.

As of April 1, Dai-ichi Kangyo Bank Ltd., Fuji Bank Ltd. and Industrial Bank of Japan Ltd., three of Japan's twelve major banks, have been consolidated into Mizuho Bank Ltd. and Mizuho Corporate Bank Ltd. under the management of Mizuho Holding in Tokyo.

The day the banks merged, ATM (automatic teller machine) transaction errors started to occur. A total of 147 incidents were reported in which debits were made from accounts although customers did not receive cash from the machine, according to a statement issued by Mizuho Holding. The debits were refunded to the customers' accounts by April 3, and the ATM systems were restored by April 7, according to Yasushi Miyama, a spokesman for the company. INFOCENTER
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The mess did not stop there. About 2.5 million of the 3 million automatic debits scheduled to be processed on April 1, including utility and credit card bills, could not be made on that day. As of April 8, a little less than half of the delayed transactions remained unprocessed, Miyama said.

There were also 30,000 cases of double debit between April 1 and April 5, corrected on Monday, and errors in 5,000 money remittances and 3,000 delayed transfers, which will be restored by Tuesday morning, Miyama said.

Last Friday, the company formed an emergency task force and an inquiry center for customers. As of noon on Monday, the center had received a total of 10,500 inquiries, Miyama said.

Before the three banks were reorganized, each of the banks had a different IT supplier. Dai-ichi Kangyo Bank used a Fujitsu Ltd. system, Fuji Bank an IBM Corp. system and Industrial Bank of Japan one from Hitachi Ltd., Miyama said.

"To make a soft landing, we decided to interface these three different systems before integrating all into one at once in April next year. But obviously, it wasn't a soft landing after all," he said.

There were errors in a program modification intended to increase the processing capacity of the system, Mizuho's statement said.

The problems occurred mainly because the volume of data that needed to be processed on April 1 was much larger than expected, Miyama said.

The task force is also tracing all the other system errors at present, he said.

The company is planning to integrate the entire Mizuho Bank system on Fujitsu equipment and move Mizuho Corporate Bank to a single Hitachi system in April 2003, Miyama said.


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