Japan Post to adopt major bank system for Yucho unit

Japan Post plans to adopt a computer system now in use at a major Japanese bank for its new “Yucho” savings bank operations, which will be created through the privatization of postal services, it was learned Tuesday.

Japan Post will invite proposals for the new system, probably from Hitachi Ltd. , Fujitsu Ltd. and IBM Japan Ltd., and make a final decision in late May at the earliest, informed sources told Jiji Press.

The state-owned postal service corporation intends to launch the new Yucho bank system in January 2009, according to the sources.

Upon government approval, the Yucho bank plans to offer new services such as mortgages, foreign currency deposits, and loans to small and medium-sized companies. The services will be launched after the breakup and privatization of Japan Post in October.

However, Japan Post’s current computer system for Yucho savings is not equipped to handle such services.

Instead of creating a totally new system, it plans to introduce a system used at a major Japanese bank and connect it to the current Yucho system, the sources said. This, it hopes, will allow a smooth changeover to the new Yucho bank system in a short period of time.

According to Japan Post’s criteria, the new system needs to be already in use at 400 or more manned bank branches in Japan and capable of covering operations at 600 or more such offices, the sources said.

Only three bank systems are believed to satisfy such criteria–the Hitachi-made system for the former UFJ Bank, the IBM Japan system for the former Bank of Tokyo-Mitsubishi, and the Fujitsu system for the former Dai-Ichi Kangyo Bank, now Mizuho Bank. UFJ Bank and Bank of Tokyo-Mitsubishi merged into Bank of Tokyo-Mitsubishi UFJ in 2006.

The Yucho bank is one of four offshoots to be created in October at the start of Japan Post’s 10-year privatization process.