The Railway team has created an automated PostgreSQL backup service that can be deployed with a single click, allowing users to easily back up and restore their databases. To deploy the service, users need to set up an S3 bucket on AWS, create an IAM user with access to the bucket, and configure the service with variables such as the database URL and cron schedule. The service uses a simple JavaScript template that can be extended to backup other databases or use alternative storage solutions. Once deployed, the service automatically backs up data to the S3 bucket, which can be easily restored using the `pg_restore` command.