Going beyond KYC: Why companies need contactability verification

You won’t find the term ‘contactability’ in the dictionary. However, in the context of identity verification, contactability can offer businesses the ability to create an enhanced layer of risk and fraud protection that goes beyond what basic KYC identity checks offer. Additionally, contactability verification empowers companies to establish trusted relationships with current and future customers.

Truly knowing your customers is a fundamental first step in complying with regulations and detecting fraud. However, given the pace of rising fraud in the digital space, relying on basic KYC identity checks alone isn’t enough to keep up. Customer contactability, including email, phone and deliverable address intelligence, touches every industry and several aspects of how a company does business.

Ensuring that customers can be contacted is a difficult task for businesses across all industries. A recent study found that close to half of consumers maintain inactive email accounts and one in five changed mobile phone numbers in the past two years. Businesses are challenged with constantly verifying changing lines of communication that are an essential part of a consumer’s identity.

Contactability verification defined

Being able to verify contact information is crucial for preventing fraud and maintaining compliance. A business could face regulatory issues if sensitive documents fall into the wrong hands. Failure to reach customers when sending important account information, such as loan terms or policy coverage details, or physical items like credit or debit cards, can result in other downstream consequences beyond regulatory and fraud risks, such as missed payments or late fees.

Email addresses, for example, are one of the most common and universal identifiers in commerce and are attached to all online and onboarding transactions. Imagine having a process that adds a layer of verification beyond a basic KYC identity check to assess email attributes for patterns indicative of fraud with the ability to restrict emails associated with identity theft, synthetic identity fraud or even “card not present” transactions.

Ultimately, businesses can leverage contactability to unlock enhanced identity verification, empowering them to better navigate the online space filled with fraud, while creating lines of trusted communication with only those consumers they want to do business with.

Establish contactability without fraud

As the fraud landscape continues to become more sophisticated, basic KYC identity checks alone have proven insufficient to combat increasing financial crimes. A Javelin Strategy & Research Identity Fraud Study found that identity theft affected 40 million U.S. adults in 2022, totaling $43 billion in losses.

As more consumers and businesses have embraced digital access, so too have fraudsters. Last year alone, over 422 million Americans were affected by data breaches and PII exposures, up from 294 million in 2021. In terms of identity verification, it is no longer enough to gather someone’s name, address and other basic personally identifiable information (PII).

The ability to engage customers across any channel and device in a purely digital way creates so many touchpoints. However, each touchpoint presents an opportunity for fraud, now and in the future. This is why businesses must go beyond an initial baseline KYC check and look for an enhanced process for identity verification that confirms contactability.

Businesses can fight fraud and ensure contactability

According to Datos Insights, application fraud has been reported to be among the top two or three biggest pain points for fraud executives at North American FIs. Application fraud is a highly data-dependent threat, so verifying and reverifying a customer’s contact information allows a business to ensure that the info is current and can be trusted.

The most effective place to stop fraud is at the starting point of your organization’s relationship with your customer: during the onboarding process. It’s the most crucial touchpoint for protecting your business from fraud and for establishing a stellar customer experience. Contactability verification at the point of application can significantly reduce downstream fraud losses—not to mention the operational impact of costly fraud investigations, collections and time spent chasing down identity thieves.

Ensuring contactability is a crucial step in preventing fraudulent activity, especially when it comes to account takeover. Companies must prioritize protection during the onboarding process and in all subsequent transactions. Account takeover is a serious threat, as it can be a relatively easy task for fraudsters to accomplish, yet it can have severe consequences. Fraudsters can gain access to victims’ accounts and modify contact details. Once they succeed in even a small task, they have the potential to carry out a multitude of unauthorized transactions. By verifying contactability, it becomes more challenging for bad actors to falsify their identity, enroll in services and gain unauthorized access to accounts.

Contactability is more than a fraud challenge 

According to our latest fraud report, identity attributes account for much more than a date of birth, passport or identity number. In fact, more than half (52%) of respondents consider their mobile phone number to be an essential part of their personal identity, while 47% said email and 43% said their home address.

If Know Your Customer (KYC) checks do not consider real-time contactability intelligence, businesses may unknowingly let in identity thieves, exposing their business to costly compliance and reputational risks. Knowing your customers is not enough; companies must be able to contact them.

Tips for getting started with contactability

Asking these questions can help your business understand what a traditional KYC check on its own likely won’t find:

• Is your customer deceased?
• Is their email associated with a known fraudulent transaction?
• Has their mobile device been reported as stolen?
• Is the phone number a floating VoIP?
• Is the address a vacant lot?

Contactability answers these important questions and more. Go beyond basic identity matching with real-time email, phone, device, deliverable address intelligence and more to instantly validate an identity and assess underlying risk—without compromising the customer experience. Onboard only those customers you trust while more effectively managing resources and reducing fraud occurrences.

Reach out to a trust expert to learn more on contactability can empower your business to make smart decisions.