Financial reconciliation is the process of comparing two independent records of the same financial activity, for example a company's own ledger and its bank's statement, matching the items that agree and investigating every difference until it is explained. It is the same process as reconciliation, explained in full in the Reconciliation entry; the word "financial" simply separates it from other kinds of record matching.
In accounting, reconciliation is often done monthly as part of the month-end close, checking each balance in the general ledger against supporting evidence. The most familiar example is the bank reconciliation. In payments and banking it is a daily or even hourly control: banks reconcile their nostro accounts with correspondent banks, and payment firms reconcile what processors say they paid against what actually arrived.
Unexplained differences, often called breaks, can point to errors, missing payments, duplicate entries or fraud, so regulators expect payment and e-money firms to reconcile customer funds frequently.