What better place to do your banking than within Microsoft Outlook?

While Outlook is arguably one of the best environments within which to bank, do not expect any banking services within Outlook — or any other Microsoft consumer software — any time soon. This despite the fact that Microsoft has around 2 billion unique consumers.

Blame that on the legacy of Microsoft’s anti-trust battles. Additionally Microsoft officials told Bank Innovation that it does not “want to compete with our bank partners.” 

Bank Innovation sat down with Microsoft executives at Sibos 2011, and the prevailing message from Microsoft was that its banking play would be as the software infrastructure provider for other software vendors, such as Temenos on the core banking side and Luup in mobile retail banking.

The Temenos-Microsoft partnership has led to a “core banking in the cloud” product from Microsoft/Temenos that Microsoft says “drives financial inclusion.” Microsoft maintains that banking in the cloud offers returns on investment five to 10 times higher than non-cloud applications.

Luup, meanwhile, leverages Windows Phone 7 to offer a mobile banking app that allows for cross-currency P2P payments. See a demo of Luup here.

Microsoft said Bank of America is also doing a Windows Phone 7 build.

But Microsoft won’t do any “bundling” of banking services, although it could offer plug-in extensions to banking providers.

“A core banking embed — that is a problem,” one Microsoft official said.