Growing loan revenue is one of the top goals of every financial institution. It’s particularly important right now, as climbing interest rates and increased scrutiny make new loans less attractive to customers. As competition to sell loans intensifies, banks must find new ways to reach existing customers in order to be successful – and to avoid having another bank take them away.

The problem: Poaching customers isn’t enough

FIS conducted a study of community bank executives earlier this year, asking what they considered to be the top issues they face. Respondents overwhelmingly listed growing lending revenue as important or very important. In fact, with a 96% response rate, it was the No. 1 concern. While the importance of loan growth shouldn’t come as a surprise, the way many financial institutions are addressing it might.

 Rather than focus on organic loan growth and find ways to meet additional needs of current customers, many banks are trying to compete against each other and poach customers. This is shortsighted, however, as it prevents banks from adding potential new revenue streams, avoids building new and deeper relationships with high-quality customers, and leaves banks more susceptible to client-poaching from competitors with newer or more enticing offers.

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