The following entry in Wikipedia is an interesting place to learn about proprietary technology, but thats ok. I infer from this technical description, that Microsoft InfoCard will/ could:

1. provide single sign on to bank customers, i.e. let a customer use one signature to log into several sites that require log in, such as online banking, online brokerage, credit card.
2. InfoCard would also log the customer into services such as Gmail, Yahoo Mail
3. InfoCard could let customers simply log into merchants for ecommerce, such as Amazon, eBay, Paypal, etc.

InfoCard – Wikipedia, the free encyclopedia

When an InfoCard-enabled application or website wishes to obtain personal information about the user, the InfoCard software takes over the display of the computer and represents the stored identities as virtual information cards. The user selects the card to use and the InfoCard software contacts the issuer of the identity to obtain a digitally signed XML document that contains the requested information. The InfoCard software allows the users to create self-signed identities for themselves, which can, for example, replace the need to remember usernames and passwords to log in to websites. Other transactions may require a certified identity issued by a trusted identity provider, such as a bank or a governamental agency.

This link came from Trevin chow’s blog – Self-proclaimed ADHD. Trevin is a Microsoft employee, working on Microsoft Passport team, and I got that from Dare Obasanjo, so thanks for the thread there.

Microsoft Passport originally had enormous hype, and Microsoft tried unsuccessfully to sell it to Banks and I was involved in those discussions. There just turned out to be no clear link between what we needed (secure Single sign on between multiple applications) and what Passport could deliver. So we will await InfoCard with interest. (more on Single sign on below)

Bank relevance:
This begs the question – is InfoCard a threat or an opportunity. In the old world wallets were sold by leather manufacturers. In the new world the wallet will be sold by technology companies. In the old world banks try to have their cards front and centre in the leather wallet. It may be the same model in the new electronic wallet. More on this in the future, as we learn more about InfoCard.

Note – why single sign on is important:

Banks’ have grown up based on products, and their computer systems are based on those products. So the Bank Account/ DDA system, the mortgage system, the Mutual Fund system, the lending system, etc are all separate, and different. They employ different technologies, have evolved at different paces, and have different business processes embedded. When a customer visits a bank branch this disparity of systems is transparent, because bank staff brilliantly manouvre between those systems, seamlessly with flying fingers.

Along came internet, and the power of the consumer. Consumers don’t know about different systems, and their fingers don’t always fly as fast. They expect to see the whole picture of their finances, and don’t understand when certain parts of their information are not available. Why can they see 12 months of information on their bank account, but only the balance on their mortgage. Why doesn’t their line of credit details, match the completeness of their credit card details?

Banks have wo choices, and that is to:

1. build systems to integrate customer information
2. provide separate access to the systems until the integration is built

Banks have been working hard on 1. but 2. is often the case for credit card, mutual funds, mortgages, private banking, brokerage, lending and each have their own log in credentials.

An “InfoCard” type application, could provide an interim step to facilitate customer access, and save Banks money until the integration is built. In addition, and infoCard would support those situations, where customers prefer to NOT have integration at the Bank level, but prefer to handle the integration themselves using an InfoCard. For example many consumers prefer to not have banking and brokerage combined for reasons of privacy, and concerns about tax. InforCard could facilitate combinations of such situations.