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Measures for Financial Crime Prevention

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Strengthening of Measures for Preventing Financial Crime Damages

Preventing Financial Crime Damages

As part of its efforts to carry out its social responsibilities as a financial institution, Mizuho has implemented various measures to prevent money laundering and the financing of terrorist activities; Mizuho also implements various measures to prevent damages that may occur due to fraudulent withdrawals involving cash cards, internet banking, and other methods as well as remittance solicitation fraud and other such criminal activity.

Measures for Preventing Money Laundering

In recent years, international demands for measures to prevent money laundering and the financing of terrorist and other problematic activities have intensified. Mizuho is working to prevent financial crimes by thoroughly undertaking confirmation procedures in accordance with relevant laws and regulations*1 when accounts are established at its branches and when transactions are made, by establishing and employing specialized units and systems to monitor suspicious and fraudulent transactions, and by other means.

One representative example of these measures is our introduction, in December 2008, of an advanced Anti–Money Laundering (AML) Monitoring System of a type employed effectively by many leading European and U.S. banks. Mizuho was the first Japanese bank to introduce such a system, which positions the Bank to continuously and comprehensively monitor multiple accounts.

  • *1The Act on Prevention of Transfer of Criminal Proceeds (revised April 2013)

Measures to Prevent Fraudulent Internet Banking Withdrawals

Recently, the incidence of fraudulent internet banking withdrawals associated with phishing sites and fraudulent software programs has been increasing. To enable individual customers to use internet banking with greater safety and peace of mind, we have introduced one–time passwords (MHBK and MHTB) and a "Risk-Based Authentication" system*2. We are also working to increase customers' awareness of dangerous situations by providing easy–to–understand examples of specific types of financial crimes on our websites.

Risk–Based Authentication Flow Diagram
Image:Risk–Based Authentication Flow Diagram
  • *2"Risk–Based Authentication" is a system for comprehensively analyzing the customer's usual computing environment and requiring additional authentication when there is concern regarding the possibility of fraudulent usage. Even in cases when a third party has obtained knowledge of passwords and other information, the requirement of additional authentication is an effective countermeasure for preventing fraudulent account usage.

Measures to Prevent Remittance Solicitation Fraud*3

Remittance solicitation fraud has become a major social problem. Remittance solicitation fraud methods have become diverse, and those seen recently include "pretending to be a son or grandson requesting the transfer or hand delivery of money," "demanding remittances purportedly in payment for internet website usage, etc.," "providing financing information via direct mail or leaflets and then demanding the remittance of guarantee fees prior to the provision of financing," "pretending to be a social insurance office, etc., that is purportedly undertaking medical expense refund procedures, and demanding the remittance of money."

Trends in the number of remittance fraud attempts detected and the total amount of resulting damages in Japan
Graph:Trends in the number of remittance fraud attempts detected and the total amount of resulting damages in Japan

Source: Prepared by Mizuho Financial Group based on National Police Agency materials

  • *3Remittance Fraud
    A general term referring to fraudulent solicitations of remittances, including claims to be in need of funds, sending of fictitious invoices, making fraudulent demands for security deposits, making fraudulent offers of refunds, etc.

To prevent customers from becoming victims of remittance fraud, MHBK and MHTB are stepping up such wariness promotion measures as the provision of verbal reminders to customers at teller counters and ATMs and the provision of additional warnings via posters, leaflets, websites, ATM screens, and other media.

Image:Introduction to Remittance Fraud Methods

Introduction to Remittance Fraud Methods

A number of MHBK employees have been designated by the Metropolitan Police Department as "Warning Meisters"*4 in honor of their individual success in proactively warning customers about remittance fraud and preventing the incidence of such fraud on multiple occasions.

We will do our utmost to prevent customer victimization by sustaining such customer alert activities at each branch of MHBK and MHTB going forward.

  • *4"Warning Meisters" are financial institution staff and others who proactively provide customers seeking to withdraw or remit large sums of money via ATMs or at teller windows with alerts and warnings and have thereby realized outstanding performance in preventing the incidence of remittance frauds.

Employee Voices

Photo:Koichiro Kuno (Warning Meister) Manager, Customer Service Section, Sakuradai Branch, Mizuho Bank

Koichiro Kuno (Warning Meister)
Manager, Customer Service Section,
Sakuradai Branch, Mizuho Bank

All of us at the Sakuradai Branch are concertedly working to prevent remittance fraud.

Each time bank employees and lobby staff members interact with a customer, we are always conscious of the need to consider whether or not the appearance of the customer, the nature of the transaction in question, or other factors are cause for concern. If we have even tentative doubts, we immediately report to a supervisor in order to obtain a confirmation of the transaction and other items.

We also cooperate with the police on a daily basis, work to share our information related to new crime incidents, implement financial crime prevention training programs, and take other measures, including region–wide measures, aimed at maintaining the security of our customers.

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