IDG News Service - When three of Japan's major banks reorganized to form the world's biggest bank, it was almost certain that some IT problems would occur. However, few could have imagined that the conflicts among the banks' computer systems would cause six days of chaos involving more than 30,000 transaction errors and 2.5 million delayed debits. Yet that's what happened to Mizuho Holding Inc. when it reorganized its subsidiaries into two new banks last Monday.
As of April 1, Dai-ichi Kangyo Bank Ltd., Fuji Bank Ltd. and Industrial Bank of Japan Ltd., three of Japan's 12 major banks, were consolidated into Mizuho Bank Ltd. and Mizuho Corporate Bank Ltd. under the management of Mizuho Holding in Tokyo.
The day the banks merged, automatic teller machine (ATM) transaction errors started to occur. A total of 147 incidents were reported in which debits were made from accounts although customers didn't 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 company spokesman.
But the troubles didn't 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, couldn't be made 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 debits between April 1 and April 5, which were corrected today, and errors in 5,000 money remittances and 3,000 delayed transfers, which will be restored by tomorrow morning, Miyama said.
Last Friday, the company formed an emergency task force and an inquiry center for customers. As of noon today, the center had received 10,500 inquiries, Miyama said.
Before the three banks were reorganized, each of them had a different IT supplier. Dai-ichi Kangyo Bank used a Fujitsu Ltd. system, Fuji Bank had an IBM system and Industrial Bank of Japan used 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 said.
The problems occurred mainly because the volume of data that needed to be processed April 1 was much larger than expected, Miyama said. The task force is also tracing allthe 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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