Introduction
Financial organizations are turning to data for deeper insights and informed decision-making. McKinsey Global Institute reports that companies leveraging data in decision-making are 23x more likely to gain new customers, 6x more likely to retain them, and 19x more likely to be profitable. Well, we know now how important it is to transition from traditional data warehouses to modern cloud-based data lakehouses, where data can be fully utilized to drive business growth.
Yet, cloud data migration is not without challenges. According to Gartner reports, 83% of data migration projects either fail or exceed their timeline and budget. Which makes careful planning a must-do for successful transitions. In this blog, we will explore strategies, challenges, and best practices for migrating legacy financial data to the cloud. With a focus on leveraging advanced AI capabilities, we’ll also highlight how Celestial Systems’ expertise can help ensure an effortless migration journey.
Understanding Data Migration
Data migration is basically transferring existing data between different storage systems, formats, databases, or applications. It involves extensive preparation, extraction, and transformation to ensure the success of the migration. Typically, data migration occurs when an organization implements new systems or processes, with the process only considered complete when the legacy systems are shut down.
What are the Types of Data Migration?
Data migration can be classified into several categories:
- Application Migration: Moving data from one computing environment to another, often involving different data models and formats.
- Data Center Migration: Transferring data center infrastructure or migrating data between systems within the same location.
- Database Migration: Moving data between different database management systems (DBMS) or upgrading to a newer version of the same DBMS.
- Cloud Migration: Shifting data from on-premises systems to the cloud offers benefits like cost savings, enhanced security, and increased scalability.
- Business Process Migration: Moving business data and applications to a new IT environment, often driven by mergers, acquisitions, or reorganization.
What is Cloud Data Migration?
Cloud data migration means transferring data, applications, and business elements from on-premises infrastructure or other cloud environments to a cloud computing platform. It involves moving data from physical data centers and databases to cloud-based servers that can be accessed via the Internet. Often, migrated workloads are deployed into modern cloud data architectures, such as data warehouses or data lakehouses, using platforms like Snowflake, Databricks, or Azure Synapse.
Cloud data migration matters because it gives you the ability to tap into the full potential of cloud computing, which offers more scalability, flexibility, cost-efficiency, and security. When businesses migrate to cloud, they can streamline operations, respond to market shifts with greater agility, and embrace advanced technologies like AI and analytics to drive innovation, competitive advantage, and growth.
Why Migrate from Data Warehouses to Data Lakehouses?
Big data and AI have shown us that traditional data warehouses have many limitations. Organizations need better ways to handle their data that are more scalable, flexible, and cost-efficient, and cloud-based data lakehouses offer just that. By migrating, businesses can:
- Break Down Data Silos: Integrate structured, semi-structured, and unstructured data across the enterprise.
- Leverage Advanced Analytics: Access to AI and machine learning tools that drive actionable insights from data.
- Improve Performance: Benefit from cloud-native scalability, enabling faster query performance and real-time analytics.
- Cost Efficiency: Pay-as-you-go models significantly reduce infrastructure and maintenance costs.
Challenges in Migrating Historical Financial Data
While the benefits of cloud data lakehouses are clear, migrating data, especially sensitive historical financial data, is no small feat. Organizations in financial services face unique challenges such as:
- Data Integrity and Consistency: Ensuring that no data is lost or altered during the migration.
- Compliance with Regulations: Financial data must comply with strict industry regulations (e.g., GDPR, CCPA, PCI DSS), which requires secure handling of data during and after migration.
- Security Concerns: Sensitive client information must be protected with encryption and other security measures.
- Downtime Risks: Minimizing disruption to critical business operations during the migration process.
Proven Cloud Data Migration Strategies
When migrating to the cloud, businesses must choose the right strategy based on their needs and long-term goals. Here are several key approaches:
- Rehost (Lift and Shift)
This approach involves moving existing applications to the cloud with minimal changes. It is a fast and cost-effective way to migrate but may not fully utilize cloud-native capabilities. - Refactor
Refactoring involves optimizing data models and applications for the cloud, enhancing performance and scalability. This strategy requires more effort but delivers long-term cost savings and operational efficiency. - Re-architect
This approach involves redesigning applications to fully leverage cloud-native features, resulting in enhanced performance and futureproofing. However, it demands significant resources and expertise. - Rebuild
Rebuilding applications from the ground up allows businesses to optimize their solutions for cloud environments. While this provides maximum optimization, it requires substantial investment and may divert focus from core operations. - Replace
Instead of migrating legacy systems, businesses can opt for cloud-based Software as a Service (SaaS) solutions. This simplifies migration but may result in a loss of customization. - Retire and Retain
Some legacy applications may not need to be migrated at all. Retiring outdated systems reduces complexity while retaining critical legacy components can ensure stability during the transition.
Each cloud data migration strategy comes with its own set of benefits and challenges. Taking the right approach depends on factors like business goals, available resources, and long-term IT strategy.
Why do Enterprises Prefer Databricks for Cloud Data Migration?
Databricks is a top choice for cloud data migration, particularly for businesses seeking to leverage big data and ML. Its unified analytics platform allows seamless collaboration across data engineering, data science, and business analytics teams, enabling faster, more insightful decision-making. Databricks also excels when it comes to backing AI and machine learning. It offers a strong setup to build and roll out predictive models, helping companies get the most out of their data.
Comprehensive Migration Tools
Databricks simplifies migration with innovative tools and services, including:
- Data Migrators: Automate data and metadata transfer from legacy systems like Hadoop to Databricks’ Delta Lake (e.g., Cirata Data Migrator).
- Workload Conversion: Automate and optimize ETL/SQL/script conversions (e.g., Raven).
- Data Validation: Ensure data accuracy between legacy and new systems (e.g., Pelican).
- Modernization Analyzers: Provide insights to guide the migration roadmap.
- BITS Platforms: Manage migration tasks through an intuitive interface.
Databricks’ ability to handle all data, analytics, and AI workloads on one platform ensures scalability and performance as your business grows. With comprehensive tools and support, Databricks streamlines migration and empowers organizations to drive insights and innovation from their cloud data.
Celestial Systems: Your Cloud Migration Partner
At Celestial Systems, we understand that cloud data migration can be a bit intricate, especially for financial organizations in tightly regulated industries. As a recognized Microsoft Solutions Partner and with Databricks Certified Data Engineers on our team, we help organizations migrate to cloud data lakehouses with minimal disruption.
- Expertise in Financial Services: We have extensive experience working with financial institutions, ensuring data security, compliance, and operational continuity during migrations.
- Customized Solutions: Our teams work closely with your IT and compliance teams to create customized migration plans that align with your specific requirements.
- Continuous Support: From planning to execution and post-migration optimization, Celestial Systems provides end-to-end support to ensure a seamless migration experience.
Case Study: Transforming Data for Financial Services
A leading Banking Major and a customer of Celestial, wanted to On-board a Large Enterprise Customers onto the Cloud.
A. Business Requirement –
- Create a new hosted environment for customer A
- The data from customer B needed to be maintained separately
- Migrate customer B’s data onto an independent hosted environment
- Secure the data and integrate it with existing applications
- Less turn-around time to set up the cloud environment
- Less time-to-market
B. Challenges –
- Adhering to Banking and Financial Industry security policies & procedures
- Data sensitivity and data security were primary concerns voiced by customer A
- Required a quick solution so that the existing customers would not be affected
C. Outcomes –
- Customer A assured of a highly reliable, secure environment that is scalable over time
- Integration with existing systems, which ensured a quick time to market
- Maximum uptime and zero failure risk
- Being a finance domain customer, the concerns regarding confidential data handling were mitigated by migrating the data onto a certified secure environment
You can run deeper into the details by exploring the complete case study.
How to Migrate Effortlessly?
Migrating from a legacy data warehouse to a cloud data lakehouse is a critical step toward unlocking the full potential of your organization’s data, especially when paired with advanced AI capabilities. However, this journey requires more than just moving data—it requires thoughtful planning and execution tailored to your organization’s unique needs, data complexities, and goals.
Cloud data migration can be difficult and time-consuming, but with the right strategy and a trusted partner like Celestial Systems, financial organizations can make the transition seamlessly. We ensure that your data is secure, compliant, and ready to drive innovation. With a scalable, governed data platform like Databricks, your organization is set up for long-term success.
Contact us today to learn how we can support your cloud migration journey
Meet Celestial’s team at Databricks’ Data & AI World Tour @New York on September 18th, 2024.
