From Threats to Transformation: The Key Risks and Opportunities Shaping the Government Sector

5 min read

2026 Executive Perspectives on Top Risks and Opportunities

Government leaders are navigating a period defined by rapid technology shifts, fiscal pressures and evolving public expectations. Protiviti’s global survey of 1,540 C‑suite executives and board members highlights how Australian government respondents are balancing immediate risks with opportunities to modernise infrastructure, optimise costs, strengthen workforce capability and advance AI adoption. Their perspectives underscore the importance of improving productivity, resilience and service delivery while managing legacy constraints, third‑party risks and emerging technologies. This report distils those insights to help leaders understand what is changing — and why it matters. Read the full results to learn how your peers are prioritising investment, modernising infrastructure and preparing for AI‑driven transformation.

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FAQs

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How can government agencies modernise legacy systems without disrupting public services?

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Legacy infrastructure is a significant near‑term risk as ageing systems struggle to meet performance, security and interoperability expectations. The survey highlights ecosystem development as a key opportunity, enabling agencies to access external expertise, scale solutions faster and share risk while modernising platforms, cloud environments and data capabilities. Protiviti supports this shift by helping agencies replatform systems, migrate securely to the cloud and strengthen data governance to improve service delivery.

What governance and regulatory challenges most limit AI adoption in government today?

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Government leaders highlight the need for strong governance, transparency and accountability as AI adoption accelerates, particularly given fiscal constraints and the importance of maintaining public trust. Adoption is also challenged by workforce capability gaps, investment requirements and the need to balance risk management with pace of deployment. Protiviti supports agencies with responsible AI governance, data frameworks and oversight approaches that enable progress while maintaining trust.

Which cyber and third-party risks pose the greatest threat to government operations?

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As reliance on third‑party providers and digital ecosystems grows, agencies face increasing exposure to cyber threats and supply chain risks. Dependencies on external technology providers, including foreign‑sourced solutions, introduce additional vulnerabilities alongside the rising frequency and sophistication of cyberattacks. Protiviti helps agencies strengthen resilience through enhanced risk management, improved oversight of third‑party providers and stronger cybersecurity practices.

Why are data privacy and infrastructure modernisation top investment priorities for government organisations?

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Government leaders are prioritising infrastructure modernisation, data privacy and cybersecurity as they expand digital services and adopt emerging technologies. Investments are focused on upgrading legacy systems, building secure and scalable environments and strengthening data governance to support performance, resilience and trust. Protiviti supports agencies in building modern architectures and governance frameworks that improve efficiency and enable secure transformation.

What long-term risks should government leaders prepare for as digital ecosystems grow?

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Over the next decade, government leaders are focused on interconnected challenges including markets and economies, security and privacy, sustainability, talent and evolving customer expectations. As digital ecosystems expand, maintaining resilience, protecting data and addressing workforce capability gaps will be critical to long‑term success. Protiviti helps agencies strengthen cybersecurity, modernise systems and build capabilities that support sustainable, secure public sector operations.

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