Growing loan revenue is one ofthe top goals of every financial institution. It's particularlyimportant right now, as climbing interest rates and increasedscrutiny make new loans less attractive to customers. Ascompetition to sell loans intensifies, banks must find new ways toreach existing customers in order to be successful – and to avoidhaving another bank take them away.

The problem: Poaching customers isn'tenough

FIS conducted a study of community bank executives earlier thisyear, asking what they considered to be the top issues they face.Respondents overwhelmingly listed growing lending revenue asimportant or very important. In fact, with a 96% response rate, itwas the No. 1 concern. While the importance of loan growthshouldn't come as a surprise, the way many financial institutionsare addressing it might.

Rather than focus on organic loan growth and find ways tomeet additional needs of current customers, many banks are tryingto compete against each other and poach customers. This isshortsighted, however, as it prevents banks from adding potentialnew revenue streams, avoids building new and deeper relationshipswith high-quality customers, and leaves banks more susceptible toclient-poaching from competitors with newer or more enticingoffers.

In order to remain successful and grow lending revenue, banksmust keep their customers in house by ensuring that all of theircustomers' needs are met.

The solution: Be the financial institution yourcustomers want (and need)

The key to loan growth and margin income improvements is makingyour bank the best option for your customers. To do that, you mustunderstand market potential, provide superior product packages anddeliver timely, high-quality service, including accelerated creditdecisions and faster funding of approved loans.

Many bankers already know their banks need to improve inthese areas, but making changes to all of their efforts at the sametime seems too daunting to accomplish. Fortunately, breaking itinto simple steps can alleviate the pressure. Here's how:

Re-evaluate customers, markets and fair share potential– Combine your existing market intelligence with availablethird-party data and insights on market potential to determine howto best serve prime customers. Compare the profitability of yourexisting relationships, particularly single-service customers, tosee if there are additional avenues for growth. And evaluate newmarkets for loan production offices.

Reconsider product offerings and relationship packages– Look for areas where you can enhance non-credit products andservice offerings in order to increase your perceived value tocustomers. Also consider new lines of business or credit productsthat may expand your offerings to them.

Re-engineer business processes – It is vital that youaccelerate the credit cycle for customers. Leverage your technologyrelationships to streamline processes and eliminate low-value work.With the appropriate tools and procedures in place, you canstrengthen customer relationships, improve pricing and reducedelivery costs – thus increasing profitability.

Re-evaluate and redeploy personnel against redefinedtargets – With new opportunities available, it's importantthat you review the skills of your sales staff; Match theiraptitudes to areas of opportunity and offer professionaldevelopment in areas where you want staff to grow. Also considerre-assigning your staff to locations or places of greatestneed.

Restructure management reporting and incentive systems– To ensure continued growth and success, you must have accuratereporting that demonstrates the effectiveness of your changes.Also, make sure your goals and incentives align with the newobjectives so you don't slip into old patterns.

The first step

Your bank probably already possesses much of the data necessaryto begin driving organic loan growth. To make a successful change,you must begin using it properly.

DanShannon is group executive, FIS ConsultingServices, in Jacksonville, Fla.