Discovery log
World Series Game 6 is on tonight and Money20/20 recap threads are still flooding my inbox.
OC night; ledger review on the kitchen table; risk dashboards and sponsor notes open.
Halloween is my checkpoint to surface the risks we’ve been deferring and the mitigation work we’re actually funding.
Halloween is a checkpoint, not a costume party. These are the five nightmares stalking my notes and how I am closing them out.
1. Ghosted data feeds
The Fed’s shutdown breakup with ADP showed how fragile “free” data is. If the central bank can lose its favorite payroll feed, any builder who relies on handshakes is one dispute away from flying blind.
Mitigation: Dual-source payroll and claims data. Monitor latency, not just uptime. Document fallbacks so sponsor banks see readiness instead of excuses.
2. Vampire capital
Retail structured products are roaring back. Investors are chasing yield after a $17T S&P 500 run. Private credit managers are sparring with regulators over opaque deals. Distressed hedge funds deploy antitrust salvos in workouts. Cheap money is gone. Complexity is the new blood draw.
Mitigation: Teach customers about fee drag and liquidity risk. Stress-test credit facilities at higher advance rates. Keep compliance in the room for every exotic product conversation.
3. Zombie BNPL models
Affirm wants a cap on late fees. That stance exposes how many buy-now-pay-later competitors rely on penalties to mask weak underwriting. If regulators agree, the undead portfolios step into daylight.
Mitigation: Underwrite on cash flow and employment signals, not penalties. Share loss-curve math with partners so they see sustainable economics, not delinquency traps.
4. Werewolf rails
Shift4 buying Worldline’s North America unit, Cross River expanding stablecoin ramps, and Modern Treasury picking up Beam all point to nonstop payments consolidation. Your integration partner today may transform overnight.
Mitigation: Diversify processors when revenue concentration spikes. Negotiate termination assistance up front. Run sandbox parity tests whenever a partner announces a deal.
5. Compliance poltergeists
OCC leadership promised a regulatory reset. Senators are pushing for an ILC moratorium. Treasury’s open-banking comment window will set data rights for the decade. Sponsor banks are flagging nonbank lending exposures. Examiners are rereading Reg E playbooks.
Mitigation: Map every pending rule to operating procedures now. Build change logs, training refreshers, and model inventories before examiners ask for them.
Halloween is fun. The bigger risk is wasting another quarter before fixing the obvious. If an investor asks what keeps me up, I will hand over this list and the remediation plan. Healthcare fintech, dental, AI peers: coffee in Newport Beach or Irvine? Let’s close the gaps together.