<p>DENVER – Internet solutions firm Cavion and check printer giant Liberty made headlines frequently around this time last year as Liberty was making a bid to acquire the bankrupt Cavion. On Feb. 17 it will be exactly one year since Liberty acquired Cavion for about $650,000. The deal with Liberty played out very publicly, and a lot of attention was given to Liberty asking clients to pay 12 months up-front for new contracts, as well as its plans to increase pricing by 50%. Liberty stated all along that it needed to see a commitment from Cavion clients in order to proceed with the deal. Liberty shored up 89 CU clients – enough for it to go forward with the acquisition. In the eleventh hour, however, Liberty's fate as the acquirer wasn't a done deal. EDS and Sunstar IP Communications (now CUNA Network Services) also made bids to acquire Cavion. Cavion President/CEO Dave Selina had ties to EDS, having worked there previously, but in the end Liberty won out. (Selina has returned to work for EDS in its Internet banking division.) Liberty Online President and EVP of Internet Applications for Liberty Mike Provenzano said since the acquisition date Liberty Cavion's client base has increased by 50%, going from 89 to 130 clients. "It (the 50% increase) is a combination of all our products. Bill pay has been a great success for us. Many signed up with bill pay and Net banking," said Provenzano. Provenzano said the 50% increase in pricing and the commitment to pay 12-months up-front scared some CUs at first. "There was reluctance early on. Those customers that did elect to go with us and sign are now at the point of contract extension. We're now billing for our second term," said Provenzano. Cavion's leadership was criticized by then Liberty President/CEO Bob Anderson for not being fiscally-responsible in managing the company. Provenzano said balanced books are top priority. "We continue to manage the business very financially responsible, and are meeting our original business plans." He did not give specific financials, but said Liberty Cavion will hit pre-tax profitability by end of 2002. He said the turbulence surrounding the deal may have helped cement loyalty among Liberty Cavion CU clients. When Cavion declared bankruptcy, there was talk that Cavion's major telecom provider, Convergent Communications, would discontinue service to Cavion clients if something didn't happen fast. When Liberty made the deal, Convergent kept the switch on. Ironically, Convergent eventually went bankrupt. Provenzano said that Liberty has since signed a deal with WorldCom for the frame-relay circuitry to connect Liberty Cavion clients to the data center – without it there is no ASP Net banking model. There are changes on the way for the fledgling Liberty Cavion. One primary goal for 2002 is to merge Liberty Cavion with Liberty Online, Liberty Online is Liberty's Web site hosting arm. It currently has over 400 credit unions. Liberty Cavion is operated out of Denver, and Liberty Online is operated out of Liberty's headquarters in Mounds View, Minn. Provenzano, with responsibilities to both groups, splits his time between those locations, spending about eight business days a month in Denver, and the rest back in Mounds View. Each group would keep its current location. He said geography wouldn't be a problem if the two were merged. "It really wouldn't matter. You can support customers from just about anywhere today," he said. The "cross-pollenation" of clients could lead to cross-selling and other mutual opportunities in the future, he said. Also on the 2002 plate is upcoming deals to offer account aggregation and online account statement delivery. He sees big opportunities for electronic delivery of documents at credit unions – not just member statements, but just about any kind of document a member might get from their CU. Liberty Cavion recently received its first SAS 70 audit. Provenzano said not having a SAS 70 was hurting it competitively, so getting the audit was vital for the proposal table. [email protected]</p>