Top 5 Australian business challenges for 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%)

• 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%)

• 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 is 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. In our survey, Australian business leaders identified cost controls, evolving regulatory processes and business growth as three of the top six immediate challenges they are facing into for the year ahead.

47% of leaders cited geopolitical disruptions and shifting levels of regional/global tension and cooperation as a Top 5 social challenge impacting the business environment.

The recent global KPMG CEO Outlook echoes this sentiment, where supply chain concerns rose back to top priority, despite having fallen from the 2021 Covid high. 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.

We put people, trust and governance at the core of AI – helping organisations accelerate value with confidence, using our Trusted AI framework.

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