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Navigating the Data Deluge: Challenges in Building a Data Lake and Warehouse for Indian Banks

Updated: Jun 24

The Indian banking sector is witnessing a data explosion. Core banking systems, treasury operations, loan management processes, and payment systems generate a vast amount of structured, semi-structured, and unstructured data. While this data holds immense potential for generating valuable insights, building a data lake and warehouse to integrate and analyze this data from diverse sources presents several challenges:

Data Silos and Integration Complexity:

  • Disparate Systems: Banking institutions often operate with a patchwork of legacy systems and applications. Integrating data from these disparate sources into a central repository can be complex and time-consuming.

  • Data Heterogeneity: Data formats can vary significantly across different systems. Core banking systems might use normalized databases, while loan origination systems might have flat files. This heterogeneity requires data transformation and standardization before integration.

Data Quality and Governance:

  • Data Cleansing and Standardization: Data from various sources might have inconsistencies, errors, and missing values. Ensuring data quality through cleansing and standardization processes is crucial before it enters the data lake or warehouse.

  • Data Governance Framework: Establishing a robust data governance framework is essential. This framework should define data ownership, access controls, data security measures, and data retention policies in line with RBI regulations like the "Master Directions - Information Technology (IT)" and the "Report of the Committee on Customer Data Management."

Security and Compliance:

  • Data Security: Protecting sensitive customer data like financial information, transaction details, and personally identifiable information (PII) is paramount. Robust data security measures like encryption, access controls, and intrusion detection systems are necessary to comply with RBI regulations and safeguard customer privacy.

  • Regulatory Compliance: Data handling practices must comply with evolving RBI directives. Banks need to be prepared to adapt their data lake and warehouse architectures to accommodate future regulatory changes.

Technical Expertise and Scalability:

  • Skilled Workforce: Building and managing a data lake and warehouse requires a skilled workforce with expertise in data engineering, data warehousing, and data analytics. Finding and retaining such talent can be challenging.

  • Scalability and Performance: As data volumes continue to grow, ensuring the scalability and performance of the data lake and warehouse is crucial. The chosen architecture needs to handle increasing data loads efficiently and support real-time or near-real-time analytics for effective decision-making.

Business Alignment and User Adoption:

  • Clear Business Objectives: The data lake and warehouse should be built with well-defined business objectives in mind. Defining the types of reports and insights required by different stakeholders across the bank ensures the data architecture caters to their needs.

  • User Adoption: Encouraging business users to adopt the data platform and leverage its insights is crucial. This requires user-friendly interfaces, training programs, and clear communication about the value proposition of data-driven decision-making.

Strategies for Overcoming Challenges:

  • Phased Implementation: Implement the data lake and warehouse in phases, starting with critical data sources and reports. This allows for incremental progress and facilitates user adoption.

  • Master Data Management (MDM): Implement an MDM solution to create a central repository for consistent and accurate master data across all systems.

  • Data Governance Committee: Establish a data governance committee to oversee data management practices, define data quality standards, and ensure compliance with regulations.

  • Invest in Data Governance Tools: Utilize data governance tools for data lineage tracking, access control management, and data quality checks.

  • Cloud-Based Solutions: Consider cloud-based data lake and warehouse solutions that offer scalability, elasticity, and a pay-as-you-go pricing model.

  • User-Centric Design: Develop user-friendly interfaces and dashboards that cater to the specific needs of different user groups within the bank.

  • Change Management Strategy: Implement a change management strategy to promote user adoption and encourage a data-driven culture within the bank.


Building a data lake and warehouse to integrate data for report generation in Indian banks is a complex endeavour. However, by acknowledging the challenges, adopting a strategic approach, and implementing the right solutions, banks can unlock the immense potential of their data and gain a competitive edge in the rapidly evolving financial landscape. 

Drona Pay has created a modular open source data stack that has helped banks modernise their data architecture while building using Apache Iceberg as the storage format for data from systems including CBS, LMS, Treasury, Internet Banking, Mobile Banking, Payments etc. The Drona Pay Modern Data Stack provides scalable data ingestion, processing, storage, governance and visualization built on top of leading open source elements including Iceberg, Debezium, Kafka, Airflow, Spark and Superset. By embracing the Drona Pay stack, Banks can offer an end to end data lake infrastructure that can be supported on leading cloud vendors and on premise. 

The journey towards data-driven decision-making requires a commitment to data quality, robust governance, and user adoption. By navigating these challenges effectively, Indian banks can harness the power of data to drive innovation, improve customer experiences, and achieve robust growth.

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