New technologies usurp workforce concerns.
KPMG’s 7th edition of the Keeping us up at night survey captures the perspectives of over 300 Australian business leaders, revealing the biggest challenges and risks on their minds for the short and medium terms.
Talent issues, which were at the top of the priority list for most business leaders for the past few years, now seem to be less pressing. Instead, digital transformation has surged to be the number one concern for most leaders this year, reflecting a general push towards embracing new technologies, including AI.
Cyber security, managing costs, stakeholder expectations and regulatory demands are also key challenges, and from a societal perspective, housing affordability and its effect on younger people is considered a major issue.
Dive deeper into our report to explore the findings and gain insights from Australia’s business leaders.
Top challenges for Australian business leaders in 2025
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%)
Key risks in 2025: what business leaders are saying
From the survey findings, we have identified three key areas of risk.
Technology and cyber risks
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.
Operational risks
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.
Geopolitical tensions
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.
Keeping us up at night 2025
Download the report for more information on the top challenges that face business leaders in 2025, and their concerns for the next three to five years.
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Helping business combat these challenges
If your business is experiencing any of these challenges, KPMG provides tailored advice based on our extensive experience and sector knowledge.
