Oracle is to implement the first phase of a new computer network upgrade at National Australia Bank.

It will initially be working on a platform for the bank's Star Direct business, which will include a specialised direct banking service to be launched later in the year.

The bank has announced it is implementing a phased replacement of its core banking systems over the next five years.

Michelle Tredenick, chief information officer for the bank in Australia, said: "Our existing IT systems have served the business well to date, however they are not sufficient to support our future strategic direction."

She suggested there is confidence within the organisation that it is the right time to bring about the system changes.

National Australia Bank was recently in the news when thousands of its customers were reported to have been temporarily unable to access salary payments due to a system error.

According to finextra.com, a software error at the bank meant that many electronic payments were not processed and payments were therefore delayed.

A recent Connect survey found that the two major concerns about outsourcing services like IT support were 'loss of control' (56 per cent) and 'budget over-runs' (43 per cent)