Reconciliation
Reconciliation is the process of comparing two or more sets of financial records to ensure they are consistent and accurate. In fintech and financial operations, reconciliation typically involves matching internal transaction records against external statements from banks, payment processors, or counterparties. Automated reconciliation uses AI and rule-based matching to process thousands of transactions per second, flagging discrepancies as exceptions for human review.
Key Details
- Compares internal ledger entries against external bank statements, PSP reports, or ERP data to identify mismatches
- Modern reconciliation engines use machine learning to handle fuzzy matching, partial payments, and timing differences
- Key reconciliation types include bank reconciliation, payment reconciliation, intercompany reconciliation, and balance sheet reconciliation
- Automated reconciliation reduces month-end close from days to hours by eliminating manual spreadsheet matching
- Exception handling workflows route unmatched transactions to operations teams with full context and suggested resolutions
- Compliance requirements (SOC 2, SOX) mandate regular reconciliation with documented audit trails
- Real-time reconciliation enables continuous close practices instead of periodic batch processing