Transparency is added to the calculus as borrowers know exactly where they stand in the loan application and what documents are needed. This puts the consumer in the driver's seat of the self-service model of doing financial business—a business model that more consumers are choosing for their financial transactions. As consumers specify everything from variable versus fixed rate to whether they'll have a cosigner and their preferred loan term, they have more control. They can instantly see the effect their choices have on their monthly payment and the overall cost of their loan.

And the rapidity and convenience of online lending means that price is no longer the decisive factor in choosing a lender. The ability to get a quick decision and apply for a loan at any time or anyplace trumps price. Consumers these days are not as willing to make a trip to a branch in their time-pressed lives when they have the option to apply at their home at 11 p.m. if needed.

Consumers still wary of borrowing 

Consumer behavior is shifting due to the economy and other reasons. Some 49% of Americans believe that the U.S. is still in recession, according to a 2014 Wall Street Journal/NBC News poll of 1,000 adults. Sixty-four percent of those polled said they are still feeling some impact from the recession and 40% said someone in their household had lost a job over the last five years.

When consumers feel nervous about the economy, they are wary of borrowing, this translates into a smaller slice of the lending pie and increased competition for credit unions. Online lending can be one more tool to maintain a competitive edge and reach potential members – especially a populace that is increasingly turning to the internet to gain information and search for products and services. Consumers have embraced the opportunity to do their comparison shopping with their fingertips instead of their feet.

New credit methods are being developed by online lenders that consist of electronic footprints that individuals leave on Facebook, Linked-In, and Google. Businesses also leave electronic footprints that are reported by respected services like Foursquare, Angie's List, Open Table and Yelp.

These new credit procedures are also a means of attracting millennials, who can lack traditional credit records and have a tentative history with credit unions and banks. They are often tech savvy and are more likely to do their shopping for financial services online.

Attracts a better quality applicant

In the past, those seeking loans went online as a last resort, but that has also changed. These days, consumers who fill out an online application usually believe that they will qualify for the loan. If somebody has dubious credit, they're more likely to go to a branch with the idea that they will be able to plead their case to a loan officer.

The lack of the personal approach is, of course, a disadvantage to online lending. If an applicant has a 650 FICO score and spotty credit, they'll get a quick answer, but it may be unfavorable. And they won't get a chance to tell their version of events, which would necessitate a trip to the branch.

Consumers, though, are getting used to doing their banking online and many prefer to pass on the personal approach for the sake of convenience. There will always be members who want to go to the branch to conduct their financial transactions, but more and more members are opting for online financial services as the research is showing.

Even mobile lending, which has gotten off to a slow start, is beginning to take off. A report from Javelin Strategy & Research showed gains for mobile lending: Over the past two years, 13% of applicants used a smartphone and 11% used a tablet for student loans; 14% used a smartphone and 9% used a tablet for home equity loans or lines of credit. Getting a loan through a mobile device will become more convenient as loan applications are simplified and easier to fill out.

Online lenders tend to attract consumers who are ready to do business. And those that let users customize purchase options and get a dynamic response, also deliver something else – education. By purchasing a loan online, the member learns about the loan process. Since education is a vital mission of the credit union, online lending can deliver teaching moments as well as multiple benefits to both the lender and the member.

It is time for credit unions to join in satisfying the growing consumer preference and find ways – through their internal efforts or partnerships – to engage in online lending in 2015 and beyond.

Brad Kime is chief revenue officer at LendKey, a cloud based technology solutions provider. He can be reached at (646) 626-7409 or [email protected].