41SHARESShareShareSharePrintMailGooglePinterestDiggRedditStumbleuponDeliciousBufferTumblr,Chole Casber Chole Casber is a product manager for TMG. In his role, Chole is responsible for various product lines from ideation through rollout, including EMV. Chole is also focused on identifying … Web: www.tmg.global Details Recent research from payment technology company NCR suggests hackers can override code on EMV chip cards to make them appear as regular magnetic stripe cards. Why is this a potential problem? Because it would mean EMV cardholders would be prompted to swipe instead of insert, leaving their cards vulnerable to counterfeit fraud.In addition, fraudsters recently claimed they were able to manipulate dual-interface EMV cards, which offer cardholders the ability to insert, swipe or ‘tap and go.’ They said near field communication (NFC) amplifiers allowed them to read card information on dual-interface cards. With this technology, the fraudsters claim, cards would be at risk even when tucked safely in pockets and purses.Card issuers, merchants and consumers should know there are security measures in place to address both of these supposed vulnerabilities.First and foremost, the entire structure of EMV is centered on a dynamic cryptogram response system. When a cardholder inserts his or her card at the point of sale, the card is authenticated using unique transaction data from both the merchant and the card issuer. Any data a fraudster may capture during this transaction cannot be used to perform new transactions.Additionally, the neural networks payment processors like TMG have in place provide an extra layer of protection against fraud. Among the tactics these systems employ is the validation of card verification values (CVVs). If a fraudster were to overwrite the magnetic stripe on an EMV chip card, the CVV from the transaction would not match up with the CVV in the processor’s system, causing the transaction to be declined.Although EMV doubters may be quick to point out perceived flaws in the technology, there are proven benefits to it. Already, U.S. merchants with chip-enabled terminals have seen counterfeit card fraud drop by 18 percent. Other countries that have implemented EMV technology have seen similar results. England, France and Canada all saw card fraud drop exponentially after deploying EMV.While no technology is completely infallible to fraud, the robust security measures card issuers and payment processors have in place help ensure EMV lives up to its promises. The continuous evolution of fraud prevention strategies further positions EMV as the top dog in the fight against fraud.
In addition, a more stringent reporting framework was launched at the PRI in Person event in Cape Town in early October. The new framework requires PRI signatories to publicly report on their progress towards implementing the PRI’s six principles each year across a wider range of asset classes and investment activities, including voting and engagement, manager selection, appointment and monitoring and the integration of ESG factors into investment decision-making processes and ownership practices. Signatories that fail to report will be delisted from the PRI in the second half of 2014.All this has added to the tumultuous year at the PRI.However, the six Danish pension funds say they left the PRI over governance issues, and a lack of transparency and democracy, which is in stark contrast to the initiative’s principles calling for better corporate governance and engagement with companies that could improve in this regard.In a statement, the schemes said: “We have, over an extended period of time, observed with concern that the governance of the PRI organisation does not live up to the basic standards we as investors require of the companies in which we invest. Despite several attempts to improve the conditions within PRI, we must, unfortunately, acknowledge these attempts have not been successful. We have therefore elected to leave the PRI organisation until the organisation re-establishes the fundamental principles of governance that existed before the organisation on its own initiative in 2010-11 radically changed the organisation’s constitution without the involvement or consent of its members at the time.”The radical change among others included the abolishment of the PRI’s AGM, the requirement of a 10% minimum investor backing to achieve any kind of non-binding and consultative vote and a lack of transparency about the discussions taking place and decisions taken in PRI’s managing bodies – the PRI Advisory Council and the PRI Association Board.The PRI said it was “deeply disappointed” about the Danish exodus, stating that it had committed to undertake a review of its governance in Cape Town and that the Council’s governance committee had already begun to define the scope of the review, which would be led by a new Council Chair expected to be appointed in early 2014.But, as companies grow bigger, a strong sense of self-belief may develop, one that is so strong it refuses to listen to its shareholders – in other words, it is the company’s way or the highway.Is the PRI in a similar situation now? Has it grown to such an extent it no longer takes on board what its signatories are saying?Meetings with signatories were held behind closed doors in Cape Town, but there were some whispers about dissatisfaction with the way it is run.Since the Danish exodus, other investors such as ABP, PGGM and MN Services in the Netherlands have, while reaffirming their commitment to the project, conceded that governance at the PRI could be improved. Some linked the less-than-transparent governance structure to the fact the organisation is no longer officially part of the UN.Has the time come for the organisation to sit back and listen to its fee-paying members – without which it would be nowhere?Sure enough, asset managers – most recently Austrian asset manager Raiffeisen Capital Management – continue to flock to the initiative in an attempt to attract clients that increasingly see ESG as part of their investment strategy.But with investment managers currently outweighing asset owners to a ratio of 775:278, the PRI has to be careful not to loose its most powerful asset owner members, which are less likely than asset managers to see this as a window-dressing exercise.The Danish exodus may have been an unwanted, early Christmas present – but there were early warning signs that were not taken seriously. In Cape Town, investors were warning the PRI it was in danger of becoming an inward-facing country club.But make no mistake, being part of the PRI does not make an investor more responsible – that always comes from the investor himself, club membership or not. The PRI has paid the price for failing to heed asset owners’ concerns over governance, says Nina Röhrbein.While you have to acknowledge the phenomenal growth of the UN-backed Principles for Responsible Investment (PRI) to more than 1,200 signatories, the exit by six of Denmark’s pension funds – well known for their integration of environmental, social and governance (ESG) issues – has clearly put a question mark over the organisation.Doubts that already existed about the organisation may have been reinforced by the bold move taken by ATP, Industriens Pension, PensionDanmark, PKA, Sampension and PFA Pension. In turn, it may also strengthen the faith some current signatories have in the initiative.The PRI has undergone some significant changes in the past 12 months. Founding executive director James Gifford stepped down late last month to pass the baton onto managing director Fiona Reynolds. Earlier this year, PRI Association chairman Wolfgang Engshuber resigned, reportedly over differences of view with the PRI board, while former head of policy at BT Pension Scheme Pension Management Helene Winch joined as the PRI’s director of policy and research.