When you have a requirement where users are using their personal mobile devices to access the corporate emails and other Microsoft office apps. You want to make sure the data in these apps is secure and also prevent data leak. Application Protection Policies (APP) Policies can be applied to the users which protects your apps and data. App Protection Policies provides the option to Allow the contacts to be synced with the native apps. The setting is called “Sync policy managed app data with native apps“. By default this setting is set to “Allow”. Along with this setting, you will require an App configuration policy to save the contacts. Save Contacts option requires the user to grant outlook permission to access the native contacts app and data stored within. When the policies are configured and applied to the user, A pop-up will be shown to the user and user just have to allow the Outlook App to provide this permission. Also, using the App Configuration Policy you can limit the contact fields which will get synced to the Native App in case you do not want to allow all the information to be synced for contacts.
For More Information on the App Configuration Policy Check this link: