Mitsubishi UFJ to face host of post-merger challenges
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[12/30/2005] While the Bank of Tokyo-Mitsubishi UFJ will be formally created through a merger on New Year's Day, bank officials said it would be at least two years before the computer systems of the two banks are fully integrated.
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While the Bank of Tokyo-Mitsubishi UFJ will be formally created through a merger on New Year's Day, bank officials said it would be at least two years before the computer systems of the two banks are fully integrated.
For the time being, customers of what will be the world's biggest bank in terms of assets will have to go to their old branches to conduct some types of transactions.
Mitsubishi Tokyo Financial Group Inc. and UFJ Holdings Inc. had pushed back the merger of their core commercial banking units--the Bank of Tokyo-Mitsubishi and UFJ Bank--from the initially scheduled starting date of Oct. 1 because of fears that the computer systems would not be integrated in time.
Employees of the two banks will have to work throughout the New Year holidays to prepare for the opening of customer services on Jan. 4.
A Bank of Tokyo-Mitsubishi official said, "If a major system malfunction should occur, everything will be ruined."
Bank officials are calling the seven days from today to integrate computer systems the "150-hour campaign."
The births of megabanks in the past have not been easy.
In 2002, a flood of problems resulted from the merger that produced the Mizuho bank group. Transactions were not completed, and some customers could not pay bills through automatic withdrawal from their accounts.
There were also problems when UFJ Bank was created in January 2002 through a merger.
The possibility for problems emerging with the new bank is much greater because of its immense size.
The new bank will have assets of 160 trillion yen and about 40 million accounts in the banks under Mitsubishi UFJ Financial Group Inc.
Some computer system connections have already been completed.
For example, since Dec. 5, customers of either of the banks have been able to use automatic teller machines of the other bank. The two banks have a total of about 9,000 ATMs in operation.
Customers can also take their passbooks to any branch of the two banks to make deposits or update their passbooks.
One of the biggest changes come Jan. 4 will be the reduction of fees to make transfers between accounts that both belong to the Bank of Tokyo-Mitsubishi UFJ.
The number of investment trusts available to customers will also double from the current 50 or so products.
However, it will be a while before customers can receive the same level of service regardless of which branch they go to.
The main reason is that even after the computer systems of the two banks are connected, the two banks will maintain their individual core computer systems.
For that reason, customers will have to use a branch of their old bank to conduct such business as making withdrawals from time deposits or foreign-currency deposits and automatically updating to a new passbook.
Bank officials plan to display signs at branch entrances and ATMs identifying which bank the branch formerly belonged to so that customers will know if they can conduct business there.
Bank officials admit that the positive effects from the merger, such as a greater range of services and a reduction in operating expenses, will only begin to emerge after the computer systems of the two banks are completely integrated.
For the time being, customers of what will be the world's biggest bank in terms of assets will have to go to their old branches to conduct some types of transactions.
Mitsubishi Tokyo Financial Group Inc. and UFJ Holdings Inc. had pushed back the merger of their core commercial banking units--the Bank of Tokyo-Mitsubishi and UFJ Bank--from the initially scheduled starting date of Oct. 1 because of fears that the computer systems would not be integrated in time.
Employees of the two banks will have to work throughout the New Year holidays to prepare for the opening of customer services on Jan. 4.
A Bank of Tokyo-Mitsubishi official said, "If a major system malfunction should occur, everything will be ruined."
Bank officials are calling the seven days from today to integrate computer systems the "150-hour campaign."
The births of megabanks in the past have not been easy.
In 2002, a flood of problems resulted from the merger that produced the Mizuho bank group. Transactions were not completed, and some customers could not pay bills through automatic withdrawal from their accounts.
There were also problems when UFJ Bank was created in January 2002 through a merger.
The possibility for problems emerging with the new bank is much greater because of its immense size.
The new bank will have assets of 160 trillion yen and about 40 million accounts in the banks under Mitsubishi UFJ Financial Group Inc.
Some computer system connections have already been completed.
For example, since Dec. 5, customers of either of the banks have been able to use automatic teller machines of the other bank. The two banks have a total of about 9,000 ATMs in operation.
Customers can also take their passbooks to any branch of the two banks to make deposits or update their passbooks.
One of the biggest changes come Jan. 4 will be the reduction of fees to make transfers between accounts that both belong to the Bank of Tokyo-Mitsubishi UFJ.
The number of investment trusts available to customers will also double from the current 50 or so products.
However, it will be a while before customers can receive the same level of service regardless of which branch they go to.
The main reason is that even after the computer systems of the two banks are connected, the two banks will maintain their individual core computer systems.
For that reason, customers will have to use a branch of their old bank to conduct such business as making withdrawals from time deposits or foreign-currency deposits and automatically updating to a new passbook.
Bank officials plan to display signs at branch entrances and ATMs identifying which bank the branch formerly belonged to so that customers will know if they can conduct business there.
Bank officials admit that the positive effects from the merger, such as a greater range of services and a reduction in operating expenses, will only begin to emerge after the computer systems of the two banks are completely integrated.
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