How do you define your test data for backend testing?

I am new to backend testing and working on a brand new project. Some of my team members design a framework using Java which drives the test data (stored in excel) to run test on respective endpoint. Every module would have an excel with multiple sheets. Each test class would read the excel sheet and parse the column value to create request/response body which is then asserted.

We later optimized the data setup and converted into CSV and started created individual csv for each endpoint.

Since it's a micro service project, I see a problem with numerous csv files for each module and hence wondering if there is some better way to do it?