Liberty Financial Cos. has introduced an Internet service with a technical twist that banks and other competitors may soon be scrambling to duplicate.

Claiming a first for financial services companies on the Net, the insurance and mutual fund complex is developing a full range of information and transaction services, including the ability for investors to "cash out" the amounts in their accounts.

What sets Liberty apart from other "transactional" innovators on the Internet's World Wide Web, including several high-profile banks, is its reliance on digital certificates to identify customers and ensure system security.

Digital certification, a derivative of cryptography, verifies that Internet customers are who they claim to be-a process known as authentication. Combining this with other technology, Liberty expects to gain a more intimate knowledge of its clients, enabling it to target products and services more precisely to their needs and interests.

"We have taken Internet investing to the next level, using a new generation of Internet capabilities," said Iang Jeon, Liberty's vice president for electronic commerce and architect of the system it calls LEAPS-Liberty Environment for Advanced Personalized Services.

People knowledgeable about on-line banking and other virtual financial services did not dispute Liberty's claim to leadership. Its digital certificate advance is "valid and important," said David Weisman, director of money and technology strategies at Forrester Research of Cambridge, Mass.

Mr. Jeon formerly worked at Forrester. He also worked at Fidelity Investments, which is responsible for one of the financial industry's more popular Internet addresses. He spent seven months getting Liberty's LEAPS to a point that he called "just a first step."

Boston-based Liberty's Stein Roe & Farnham fund unit, which debuted its Web site this week, is the first financial services organization issuing digital certificates to consumers. Mr. Jeon said the features LEAPS makes possible, including cashing out through transfers to linked bank accounts, "are being rolled out gradually."

To obtain certificates, visitors to the home page must call an 800 number and provide information comparable to what is required for a telephone transaction. For an added level of security, they also must put signature guarantees on file. But once the certificate is in a customer's computer, there is no need for passwords, and the integrity of communications is assured.

Liberty is also issuing digital certificates to agents and brokers- another first-through its Keyport Life Insurance subsidiary. It plans to do the same as a sales and service tool for Colonial Group Inc.'s mutual funds. And it would later employ the technology in its bank distribution channel for investment products.

While digital certification is gradually moving toward the mainstream, spurred by the beginnings of Internet commerce and by the credit card industry's embrace of the technique in its Secure Electronic Transactions standard, Liberty seems to be making something of a quantum leap.

Its 1.4 million account holders have an average age older than 50, Mr. Jeon said. Digital certificates are part of a package designed to appeal to such people with a "whole portfolio" perspective, he said, with information consolidated from multiple financial service providers. It is not for active stock traders-who might be drawn to the on-line services of Charles Schwab & Co. or upstarts like or E-trade-nor for computer- literate devotees of Intuit Inc.'s Quicken or Microsoft Money financial management software.

Typical of comprehensive Internet offerings, Liberty's are built with others' technology: BroadVision Inc.'s One-to-One software for customer profiling and personalization, Investment Dealers' Digest Enterprises' systems for Web hosting and financial and news data bases, and BBN Corp.'s Safekeyper for certificate management.

Mr. Weisman at Forrester said Liberty is just beginning to understand the potential of a leading-edge system like BroadVision's and will need time to "gain experience with the technology's strengths and limitations."

"We want to offer real content while getting to know our customers better and understanding their needs," Mr. Jeon said. "The only way to do that is with authentication-the ability to safely store private information-and an architecture that lets you take full advantage of the capability.

"There has been a lot of talk about mass customization and personalization," he added. "It's about time we started trying to deliver on that."

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