In the 1979 movie "Alien," a spaceship crew is terrorized--and just about wiped out--by a gruesome creature able to survive in any type of environment because of its singular ability to change form. While bank industry observers might disagree about whether Citicorp, the giant $134.7 billion bank holding company, moves with the same suddenness as the creature in "Alien," the holding company's ability to adapt to today's changing regulatory environment of banking might well have served as the movie's inspiration.

Citicorp's pioneering use of the bank holding company concept, adopted in 1968, has been crucial to the bank's ability to change, because it gives the bank an entry into interstate banking with unregulated, non-banking subsidiaries. Possibly even more important was the bank's early, total commitment to electronic banking. John Reed, vice chairman and guiding force behind Citicorp's futuristic consumer orientation, initiated in the 1960s, says that, in time, "all but the most sophisticated investment banking transactions will become attributes or features of a financial service network."

The result is that today, depending on your perspective, or even where you bank, Citicorp might appear to be your neighborhood savings bank, commercial lender, consumer finance center, or, as in its most recent incarnation, a newly revived savings and loan. The bank's recent purchases of $4 billion First Federal Savings & Loan of Chicago and $1.8 billion New Biscayne Federal Savings & Loan of Florida are being hailed as the death knell to prohibitions against interstate banking.

Such fancy financial footwork should come as no surprise. "In a global marketplace, success will go to the agile," Citicorp Chairman Walter Wriston wrote in the bank's 1982 annual report. And, he added somewhat ominously, "we have only begun to exploit the full potential of our global network."

The recent savings & loan acquisitions jibe with the bank's early 1970s proclamation that U.S. consumers, rather than institutions, were key to the future of U.S. banking. Indeed, about 8 million of Citicorp's 13 million individual customers are in the United States. And 80% of the assets of the Individual Bank (Citicorp's consumer entity) come from outside the New York metropolitan area, Citicorp's ancestral home. According to Vice Chairman Thomas Theobald, the Individual Bank's goal is to have 35 million individual customers worldwide.

To push further into worldwide banking, Citicorp has mapped out a three-pronged plan for automation: automated branches, home banking and international data centers. This strategy is targeted primarily toward Citibank, the holding company's flagship. Logically, the centerpiece of the first component, the automated branch, is the automated teller machine (ATM). With more than 600 ATMs scattered about metropolitan New York, upstate New York, Hong Kong, Puerto Rico and the Baltimore area, Citicorp places first in single-bank ownership of ATMs.

An early vision of electronic banking led Citicorp to establish machine banking in 1977. The only problem was that, then, no vendors offered Citicorp everything it wanted. "They made it in black, we wanted it in blue; we wanted certain functions, and they said no," says Executive Vice President John Heilshorn, in charge of corporate strategy and development. Determined, Citicorp turned to its wholly owned research and development subsidiary, Transaction Technology Inc. (TTI), for ATM design and production. After a bumpy start--TTI couldn't keep up with Citicorp's demand, according to one former Citibanker--installation and usage went fairly smoothly, until the bank attempted to limit access to human tellers to customers who had a minimum of $5,000 in their accounts. Critics of the bank's cold-bloodedness had a field day and the bank backed off. Heilshorn minimizes the brouhaha as a public relations miscalculation.

Today, Citicorp's ATMs handle more than 70 million transactions a year. Although other large New York banks, including Chemical, Manufacturers Hanover, Bank of New York, Goldome and National Westminster Bank, have just joined The Treasurer ATM network, Citicorp remains unfazed by the competition. The bank also vows to stay independent, insisting that its proprietary ATMs will hold their own. Citicorp claims superiority in its ATM abilities, saying that, because of the strength of the underlying computer system, its current crop of machines will have a long life expectancy.

Some features of that system are the on-line capture of debits, leaving no paper trail; the ability to transfer a customer's funds from one account to another and, in some locations, the ability to dispense travelers checks. Further, Citicorp says that it can add new functions to machines simply by making changes in the central computer system.

And, with its Citicard, Visa, MasterCard, Carte Blanche, Diners Club and Choice card holders, Citicorp already has in place a network with a potential customer base that's 4 million strong.

By 1985, Citicorp anticipates the installation of second-generation ATMs that will handle foreign currency and instant check cashing, providing that the customer keeps interest-bearing accounts with the bank. Undaunted by the earlier flap over its elitist $5,000 minimum, the second-generation ATMs will also be able to process "account opening, sales of products such as certificates of deposits and service functions," according to Paul Glaser, senior vice president and head of the individual Bank's Systems division, which includes TTI.

Citicorp's second electronic path to the consumer--its home-banking service--is called HomeBase. Citicorp officials are mum on how much money has so far been spent on HomeBase, but industry watchers guess it doesn't nearly match the $20 million that Chemical Bank spent for its own Pronto home banking system.

On the surface, Citicorp seems to have fallen behind Chemical and Bank of America in the home banking race. "It's taking them forever to get it done," says Donaldson, Lufkin & Jenrette bank analyst Susan Skinner. Citicorp is running a live experiment with HomeBase for under 1,000 customers, but the bank won't say where, and large-scale expansion has yet to be announced. Curiously, at the same time that the official test is taking place, the service is quietly being offered to customers on a limited basis just outside of New York City.

Meanwhile, at Bank of America, a spokesman maintains that, while Citicorp is not even ready for a roll-out, B of A's HomeBanking service already boasts 8,000 customers in northern California. Further, he says, the bank plans to move into southern California by the end of April. Altogether, B of A's goal is to have 25,000 HomeBanking customers by year-end. And, on Citicorp's home turf, Chemical Bank says it's shooting for 15,000 Pronto customers by year-end.

Despite the very limited availability of HomeBase, some believe that once it is out in the general market, it may well prove to be the superior product. Vincent Pica, vice president of MIS operations at E.F. Hutton, says he thinks that one reason for this is that "Citibank has the better approach to in-home electronic bill- paying."

With Citicorp's HomeBase, customers can pay bills to vendors that they specify and maintain in a customer-generated data base. With Chemical's Pronto, however, bill paying is limited to the 400 to 500 top companies in the country that the bank has identified, says Pica. Chemical's system may be more elegant, he says, but considering the number of retailers and service organizations, Citibank offers a more practical jumping-off point for going national.

HomeBase will work on any home computer, and Heilshorn teases that "the technology is saying that [HomeBase] capability may be extended to portable computers--you can buy and sell stock while walking down the street." About the money that Citicorp has invested in home banking, Heilshom says only that the bank has "invested heavily in HomeBase over the years," adding that Citicorp has spent $500 million in the last few years for electronic distribution, in general.

What is clear, though, is that Citicorp views HomeBase as more than just a response to the blurring of the laws against interstate banking, but also as a useful agent of change. Vice President Christopher Reid, head of home banking, says "it is hard to believe that branch banking regulations will apply to a small box weighing 13 pounds [that] requires only a jack and one electrical outlet." Addressing the same issue, Heilshorn declares that, in the future, Citicorp's product line, "if not broadened through regulation, [will expand] through customer and transaction power."

Citicorp's Consumer Banking System (CBS) is being developed now at TTI to support these advances in the Individual Bank. In fact, the Individual Bank--specifically the electronic branch project, home banking and CBS--accounts for 60% of TTI's budget. CBS is the bank's customer-oriented processing system, which uses a common data base for both on-line and deferred processing, and that will eventually replace the present account-based processing systems.

Currently, the Individual Bank runs on a combination of batch-style accounting systems and auxiliary on-line systems developed by TTI in the early 1970s. The latter allow for only partial account integration: tellers can keep customer records on-line during the day, but the actual posting is done at night.

According to Glaser, CBS' development costs are expected to reach $100 million. So far, half that amount has been spent. And for the computers, terminals and network equipment that the Individual Bank uses now, the costs total $250 million, plus an additional $125 million a year for operating expenses.

Citicorp is confident that it will get its money's worth. Parts of the Individual Bank's CBS will also be applicable to the data processing systems used in Citicorp's Institutional Bank, which is supported by three main systems. The North American Banking Group (NABG), with 7,000 domestic corporate clients, has its own data processing system, as do international financial institutions transacting business out of New York.

The third and final part of Citicorp's master plan is Cosmos, an automated system that will support the bank's overseas customers through data centers in more than 50 countries. First used in the early 1970s, Cosmos is now, "after relentless application and tuning, beginning to emerge from the back office and hook up directly with customers," says Byron Knief, senior vice president in charge of NABG's marketing efforts. Cosmos consists of modular applications built on a file management structure and provides a slew of bank services, from funds transfer to asset-based finance. Through Cosmos, more than 4,000 foreign customers are electronically linked to Citicorp.

The testing process for putting Cosmos on-line is representative of the Institutional Bank's systems development, in general. Originally built in Brussels (some Institutional Bank systems development is done in New York), the Cosmos systems are then moved out to the regional data centers to be tested locally and tailored to the needs of individual countries.

In addition to turning Cosmos into a real-time, on-line system, Citicorp has announced a few other ongoing projects. Two major ones are the Institutional Bank Global Data Base and the Intelligent Worldwide Telecommunications Backbone.

The Global Data Base, part of it to be lifted from the Individual Bank's CBS, will enable the bank to achieve "worldwide data integration," according to some Citibankers. With the data base, they say, any customer will be able, from any office, to access Citicorp services.

For the Telecommunications Backbone, Citicorp has three goals. First, to enable the bank to offer its services using any computer standard; second, to compress telecommunications messages for maximum efficiency and minimum cost to the bank and its customers; and third, to establish a system that tracks costs incurred anywhere in the bank's network back to the user.

Lawrence Small, executive vice president in charge of NABG, sums up the goal of his group and the Institutional Bank as a whole when he says, "we are spending our competition into the ground as we wire the world. Well before the end of this decade," he adds, "the treasurer of a multinational in the heartland of America will have on-line, real-time access to every significant piece of information concerning his company's cash and investments on a 24-hour basis, no matter where in the world the money happens to be."

Citicorp's telecommunications needs are served by two transponders that it launched in mid-1982 on Western Union's Westar V satellite. Citicorp was the first non-carrier company to own its own transponders. The bank owns four earth stations that collect signals sent from the satellite, which has been used by customers in Citicorp's major U.S. markets. Bank projections estimate Citicorp will save $70 million in telecommunications costs in the first three years of the satellite's operations.

On the more routine side, the bank handles its inter-New York City communications with telephone equipment and voice and data switching equipment supplied by Northern Telecom. Since 1980, the bank has linked its midtown Manhattan operations (at the Citicorp Center on 53rd and Lexington Avenue and across the street at 399 Park Avenue) with its 111 Wall Street location via a proprietary microwave system.

More recently, Citicorp installed a fiber-optic cable through the city's subway system to link the Citicorp Center to 111 Wall Street. According to Wade Coleman, senior vice president in charge of corporate services, this arrangement should accommodate the bank's midtown-to-downtown communications well into the 1990s.

When it comes to forecasting, Citibankers have hardly leaned toward conservatism, nor have they worried about stepping on anyone's toes. At the end of last year, Vice Chairman Theobald told a London audience that Citicorp expects to "replace our time-sharing non-bank competitors as the pre-eminent distributor of financial data base services worldwide," as well as "integrate banking, electronic publishing and telecommunications services."

That doesn't please the Association of Data Processing Societies (ADAPSO). In 1980, ADAPSO testified in court and before the Federal Reserve Board that Citicorp's time-sharing service, Citishare, engaged in businesses prohibited by banking law. Citicorp claims the matter has been settled to its advantage.

It remains to be seen, however, if ADAPSO will press forward to try to limit Citicorp's time-sharing and data processing services to banking and closely related financial services. Citishare continues to provide data processing services to municipalities, for example. "Banking is a lifeline business," says ADAPSO spokesman Dave Sturtevant. That subtly gives banks an unfair competitive advantage over customers, he says. "Our number one concern is protecting fair and open competition."

Perhaps Sturtevant and others eager to keep Citicorp off their turf should worry. Citicorp's Heilshorn dismisses ADAPSO's claims, explaining that the bank is only doing what it's always done: provide service that clients request using available technology. "I really question the logic of saying computers are a different functional activity than the mail and the telephone," he says.

Heilshorn offers another prediction that's guaranteed not to win Citicorp a lot of new friends. "Any consumer, any customer, any household in the world is a prospect of Citibank," he says. And, he doesn't just mean for traditional banking services. "Our vision of the future is that we can command any business."

With that overt declaration of hegemony, Citicorp once again distinguishes itself as different from other banks, as it does by keeping its ATMs proprietary and by creating so much of its operating and systems software.

However, not everyone considers that an appropriate strategy today. As DLJ's Skinner points out, "Citicorp's approach--to be first, to be proprietary--has always meant a lot of money. It's very, very expensive." And, unlike when the bank first made its commitment to technology in the late 1960s and early 1970s, the landscape now is filled with competent vendors and off-the-shelf solutions.

"It's just not as economically evident that they need to develop so much in-house," she says. And as Walter Wriston's August retirement looms ever closer, opening up the wealth of possibilities that accompany any change in leadership, banks and other financial service companies will be watching for any changes in Citicorp's network and systems decisions.

At the end of the movie "Alien," the creature is finally disposed of when the last surviving crew member manages to eject it into outer space. But the audience is left to decide whether the alien actually dies or if he is simply banished to the cosmos--a hostile environment in which the creature will have to continue to evolve and adapt in order to survive. Of course, no one questions whether Citicorp will survive; rather, the question is, into what will it evolve?