2  BIS Review 49/2005  However, meeting this ambitious objective implies a significant evolution of the current retail infrastructures towards a pan European infrastructure, the so called PEACH, which will aim at reinforcing the global efficiency of payments in Europe. The main achievement with regards to infrastructures until now has been the launch of STEP2, since it is the first infrastructure compliant with the PEACH requirements, as defined by the EPC. But there is still a significant way to go since STEP2 handles low volumes, 170.000 payments in May 2005, and can still not offer the same level of service as national ACHs. In that context, it must be seen as a positive prospect that most national retail payment systems are now preparing themselves to the implementation of SEPA, through the spreading use of standardisation, which will allow the interoperability of infrastructures. In France for example, several banks have initiated the STET project in view of SEPA. However, one should note that the idea of consolidating the retail systems platforms is for the time being not really at the forefront of market initiatives, even though consolidation is a source of cost savings and efficiency. Why such a gap in the level of integration between large-value payment systems and retail payment systems? I see two main explanations. First, large value payment systems have benefited from the incentive of the adoption of the single monetary policy in the Euro area, which made the creation of TARGET mandatory.
In addition, the conducive tax regime which accords neutrality in treatment between Islamic and conventional financial products sets the stage for greater innovation to take place to support the progressive development of the Islamic financial services industry going forward. With this strengthened Islamic financial infrastructure now being firmly achieved in the first phase of the Financial Sector Masterplan, the Islamic financial services industry is poised to tap new growth opportunities and maximize the full potential of Islamic banking and finance. The entry of Commerce Tijari Bank Berhad into the Islamic financial services industry at this juncture is indeed timely. The challenge that lies ahead calls for strategic positioning to maximise the potential that a universal Islamic banking licence accords in tapping new growth areas. While Islamic retail, corporate and investment banking product offerings have grown in sophistication, financial activities such as private equity investments, real estate investments, private wealth and fund management are now rapidly gaining prominence. There is therefore a need to allocate adequate resources to build distinct capabilities in these newly emerging areas. The move into these strategic niche markets would also increase the diversity of new asset classes for Islamic investment. This would not only contribute to further enhance the effectiveness and efficiency of the financial intermediation process in the Islamic  BIS Review 26/2004  1  financial system but also enhance Malaysia’s potential as an attractive international hub for Islamic finance.