A disruption to Japan's payments clearing network last week was caused by a failure in backup measures, its operator said Wednesday, while acknowledging that the issue has "shaken trust" in the entire clearing system.
Customers affected by the system failure will be compensated by their financial institutions for any charges incurred due to the service disruption, the Japanese Banks' Payment Clearing Network said.
Transfers via automated teller machines, online banking and bank counters were all delayed during a two-day system disruption through Oct. 11, the first to impact bank customers since the network was launched in 1973.
The operator revealed that a simultaneous system update at bases in Tokyo and Osaka had rendered its backup system unable to function at the time.
An official said the operator is currently verifying if there were any issues with operational procedures as "there is a possibility that if the updates had been done one by one, this situation could have been avoided."
The system update, carried out during the long weekend from Oct. 7 to 9, aimed to upgrade the intermediary computer connecting financial institutions to the clearing network.
An error occurred during the processing of cross-bank fees after the referenced data was found to be corrupted. Such errors were not detected during prior testing, said the operator.
The disruption affected over five million transactions at 10 financial institutions across the country, including MUFG Bank.
Matsuo Tsuji, chairman of the operating company, apologized at a press conference for "causing great inconvenience and concern to customers and financial institutions."
The compensation will cover fees including those for transfer cancellations and late payments, as well as interest charged on accounts that temporarily had insufficient funds, according to the operator.
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