KPMG surveyed over 300 Australian business leaders to uncover the top issues keeping them up at night in 2025 and beyond.

Top 5 challenges for businesses in 2025

• Digital transformation, optimisation and its ROI (53%)
• Addressing cyber risks (42%)
• Inflation driven cost controls (39%)
• New technologies (including AI), use cases, and ethics (39%)
• Evolving regulatory processes and reporting (38%)

Top 5 challenges for businesses in the next 3–5 years

• Digital transformation, optimisation and its ROI (53%)
• New technologies (including AI), use cases and ethics (48%)
• Identifying and growing future market opportunities (46%)
• Meeting regulatory and stakeholder transparency demands (37%)
• Cultivating greater organisational agility and flexibility (37%)

Top 5 social issues in Australia

• Housing availability and affordability (48%)
• Future skills gap across technology, data science and health (48%)
• Geopolitical disruptions and regional/global tension (47%)
• Social impact of new and disruptive technologies (47%)
• The ageing population (42%)

Digital transformation rose from fourth place in 2024 to the top challenge of 2025, with cyber risks sitting at a close second. While the world is warming to the benefits of AI adoption, business leaders are concerned about the associated risks surrounding IT, AI and cyber security, including ethical use, government regulations and investment costs versus returns. This is further amplified with growing customer dependence on technology for goods and services.

The elevated risks associated with the operations of running a business have been one of the most consistent topics over the last two years. Higher costs, more competitive marketplaces, and increases in regulations are collectively keeping executives and boards on their toes all over the world. 2025 appears to be a year of dealing with the nuts and bolts of a slow economy while looking for cautious growth where possible. Australian business leaders have identified cost controls, evolving regulatory processes and business growth as three of the top six immediate challenges they are facing for the year ahead.

47% of business leaders cited geopolitical disruptions and shifting levels of regional/global tension and cooperation as a top 5 social challenge impacting the business environment. The driver of this rise can be attributed to concerns around global trade tensions, the adoption of punitive tariffs, and an increase in inward-looking government policies.