In international banking, money doesn't physically cross borders; ownership of accounts shifts. This relies on Nostro ("Our" money at your bank) and Vostro ("Your" money at our bank) accounts. For a fintech building a global wallet, understanding this mirroring is essential because the "Truth" of a balance is held in a database you do not control (the correspondent's ledger).
The Mirror Accounting Principle
When Bank A (USA) sends funds to Bank B (UK):
Bank A debits its internal liability (the sender).
Bank A credits its Nostro account held at Bank B (an asset).
Bank B receives the SWIFT message.
Bank B credits its Vostro account for Bank A (a liability).
Bank B credits the final beneficiary.
The Engineering Problem: Bank A's view of the Nostro balance is a "Shadow Ledger." It only matches Bank B's Vostro record if every fee, FX rate, and timestamp aligns perfectly.
Reconciliation Asynchronicity
Reconciling Nostro accounts is notoriously difficult due to information asymmetry.
Timing Gaps: You credit the Nostro shadow ledger immediately upon sending the instruction. The correspondent bank might not process it until their local morning. This creates a permanent "Float" or unallocated break.
Hidden Fees: Intermediaries often deduct fees from the principal without explicit signaling in the initial message. The reconciliation engine must handle "Principal Mismatch" exceptions where the expected debit is $10,000 but the statement shows $9,980.
