Federico Campoli discusses the challenges faced while optimizing TransferWise's analytics database, initially built on MySQL, which struggled with performance issues as data grew. The solution involved migrating to Snowflake for better scalability and performance, utilizing Fivetran for data streaming, and implementing PostgreSQL with a custom tool for data obfuscation to ensure compliance with customer data security policies. The presentation highlights the step-by-step process of replicating and obfuscating data effectively while maintaining data integrity and security.