Contact Point Verification is a key step in banking operations, focused on confirming that the communication channels provided by customers. This includes checking for active and authentic mobile numbers, email addresses or postal addresses. By validating these contact points, banks make sure that important alerts such as transaction notifications, OTPs for Internet banking and statements reach the right recipient without delay or interception.
A strong process strengthens security across multiple touchpoints. For Internet-banking log-ins and fund transfers, an OTP sent to a verified number or e-mail ensures that only the genuine customer can approve high-value transactions. In customer onboarding, instant confirmation of email addresses prevents mistyped or fraudulent entries from entering the system. Even routine communications, like sending monthly statements or promotional offers, benefit from CPV. Banks avoid the costs and reputational risks of bounced emails or messages sent to inactive numbers.
Moreover, it contributes to operational efficiency. Automated checks, such as carrier lookups to verify number status or SMTP pings to test e-mail server availability, can be completed in minutes. This significantly reduces manual follow-up. When automated channels fail, voice-call or letter-dispatch methods ensure no customer is left unverified. This multi-channel approach enhances the customer experience by minimising onboarding friction. It also reduces the resource burden on call centres and branch staff.
In banking, Contact Point Verification relies on a multi-channel strategy to ensure that customer communication details are both valid and in active use. Automated mechanisms, such as carrier lookups and SMTP handshakes, quickly filter out invalid entries. One-time passwords (OTPs) sent via SMS or e-mail provide a near-instant confirmation of possession. While interactive voice response (IVR) calls serve as a secondary digital protection. Where digital channels fail, a manual agent call or postal confirmation letter bridges the gap, ensuring that even customers in low-connectivity regions can complete verification.
A hallmark of an effective programme is its fallback logic: if an SMS OTP isn’t delivered, the system should automatically trigger an IVR prompt or e-mail link without manual intervention. This continuity reduces customer effort and cuts down support overhead. Moreover, all verification attempts and outcomes should be logged in real time to create an audit trail capable of withstanding regulatory scrutiny and forensic review.
The Reserve Bank of India embeds Contact Point Verification into its KYC and CDD norms across these key scenarios:
- Periodic KYC Updation: When a customer updates only their postal address, the new address must be verified through positive confirmation within two months, by means such as an address-verification letter, contact point verification, deliverables, etc.
- Sole Proprietorship Documentary Exception: If a sole proprietor cannot furnish two activity-proof documents, the bank may accept one, but only after it undertakes contact point verification … to establish the existence of such firm and satisfy itself that the business activity has been verified from the address of the proprietary concern.
- Enhanced Due Diligence for Remote Onboarding: Before allowing operations in a non-face-to-face account, banks must confirm the customer’s current address via positive confirmation methods, with verification listed alongside letters and other deliverables.
Contact Point Verification delivers multiple advantages across a wide range of banking operations, enhancing security, efficiency and compliance.
1. Secure Onboarding and Account Activation
When a new customer applies for a savings or current account, whether in branch or via digital channels, it prevents fraudulent or erroneous enrolments. By confirming mobile numbers and e-mail addresses in real time, banks ensure that onboarding credentials (such as Internet-banking log-ins or debit-card PINs) reach bona fide applicants only. This not only reduces the incidence of “dead” or fraudulent accounts but also diminishes manual rework.
2. Safe Transaction Authorisations
High-value fund transfers and bill payments depend on one-time passwords delivered to verified channels. it underpins transaction security by ensuring that OTPs cannot be intercepted via stale or spoofed numbers.
3. Dormancy Reactivation and Periodic Re-Verification
Many customers fall into dormancy, typically after 12 – 24 months of inactivity, raising the risk of unauthorised reactivation. This, applied at the point of dormancy reactivation (sending OTPs or verification calls) confirms that contact details remain under the customer’s control.
4. Regulatory Audit and Compliance Reporting
It generates a rich audit trail: every carrier-lookup response, OTP dispatch, IVR call log and agent-confirmation note is timestamped and stored. This comprehensive record helps banks demonstrate compliance with KYC Directions and Data Protection norms during inspections.
