Customers that used to rely on bank and credit union branches for their financial needs are flocking elsewhere. Alternative financial services (AFS) providers and big-box retailers are stepping up their marketing game in the banking marketplace and snatching up customers right and left.

Here are a few tips for traditional banks and credit unions to stay in the game.

Diversify your products

One of the biggest draws of alternative lenders is the array of products and services that speak to their customers. Consider introducing your own version of them, with the added bonus of the more trustworthy nature of a traditional bank. Think about including prepaid cards, fee-free check cashing and money orders.

Speed up your turnaround

Another of the key benefits of using an alternative lender, at least in the eyes of the consumer, is that credit decisions happen quickly and cash is disbursed in a short window of time. Often AFS customers have immediate need for cash for paying bills. In order to meet your customers where they're at, and operate in the same timeframes that they do, consider tightening up your approval window.

Emphasize one-to-one relationships

The most important benefit you offer that an AFS provider typically doesn't is relationship. Though, this aspect of banking doesn't always resonate with the average AFS user. Emphasize the importance of a one-to-one relationship by offering advice and guidance on products that fit individual need, rather than generalizing. And talk to them in conversational tones to show you're more than a stuffy bank or credit union - you're a potential personable relationship.

Incentivize at the start

This one works across the board, but it's also true of frequenters of AFS providers. Provide an incentive for bringing their financial business to you, rather than a competitor. Come up with some unique ideas that involve cost-of-doing-business write-offs, such as gift cards or cash rewards, and you'll endear yourself to consumers who historically have low trust in the banking system.

Segment your communication

Not all emails are built the same. Make sure that you're communicating to your customers on an individual basis. AFS providers blanket the market with "deals" and "offers," so take it one step further and analyze consumer behavior in key neighborhoods. Market products that match the demand, rather than "Dear Current Resident"-ing them to death.

There's still a place for you in this key demographic - just make sure you're communicating and presenting yourself in a way that's attractive and unintimidating to them.

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