Look no further than Citigroup to catch a glimpse of the future of bank product development.

In a revealing Meetup fireside chat yesterday evening, Alex Sion and Rachel Moore shared details on the inner workings of Citi’s internal innovation operation, known as D10X. By my read, D10X will largely replace traditional product development at Citi by the end of the decade.

The standing-room-only Meetup was presented by Bank Innovation and INV Fintech.

Sion, who co-heads D10X and was a co-founder of Moven, explained that the unit is charged with internal incubation of startups launched within Citi. This complements the corporate venture funding of Citi Ventures, which has made more than 100 investments since its 2009 launch, according to Pitchbook. D10X resides within Citi Ventures. Citi Ventures has more than $100 million of capital at its disposal.

D10X operates like an internal startup incubator: ideas are developed by Citi executives and pitched internally to a committee of senior Citi employees with the key question, “why should Citi be in this business?” The “startup” is then launched with D10X’s advisory and supported with resources, such as design and developers. Moore, a Citi senior vice president, is a D10X entrepreneur – she launched Out of the Red, a Citi startup aimed at helping bank consumers get out of their credit card debt.

If this sounds like product development, it is, but with a decidedly startup orientation. This is product development as a competition of ideas, people and execution, unlike traditional banking product development efforts that are iterative (at best). I asked Sion how D10X’s ventures, which number 22 today, play with Citi’s traditional product development teams, and he acknowledged that there was some overlap, but that D10X ventures generally have a more ambitious scope or bogey.

My sense is that startup-oriented product development will become the norm in banking within several years. Without the startup aspect, product development lacks an edge and the realities of the global financial services marketplace, and that includes startups. It is in the startup ecosystem that the “game of thrones” of fintech ideals is waged. Banks need that competition to ensure their product menus are sufficiently dynamic. To get that edge, banks need to engage with tech incubators and accelerators – yes, including our INV Fintech – not just for corporate venturing or acquisitions, but for mission-critical product development. Just being a “fast follower” won’t cut it.

Check out additional coverage of the Meetup here.

Bank Innovation Ignite, which will take place March 2-3 in Seattle, is a must-attend industry event for professionals overseeing financial technologies, product experiences and services. This is an exclusive, invitation-only event for executives eager to learn about the latest innovations. Request your invitation.