Stream Processing vs Batch Processing: When to Use Each

Batch processing offers throughput and accuracy, while stream processing offers latency. Your architecture must decide which metric survives production requirements. What We're Building We are designing a financial transaction monitoring system. This system requires real-time fraud detection for immediate blocking but also daily reconciliation for regulatory compliance. We cannot choose one paradigm exclusively. We must structure our data pipelines to handle high-volume historical data efficiently while processing live events with low latency. The core trade-off involves computational resources, consistency models, and operational complexity. Step 1 — Define Latency Requirements The first step is distinguishing between micro-batch and real-time needs. Micro-batches are small chunks processed periodically. Real-time implies processing each record as it arrives. We define a latency threshold T . If user experience demands T < 100ms, batch is insufficient. If the system tolerates T < 5 mi