The biggest risk bankers face over the coming year is protecting customers' privacy and the biggest risk they face over the next five years is climate change, according to a new survey.EY and the Institute of International Finance surveyed chief risk officers and other senior risk executives at 94 banks in 43 countries.They found that "globally, banks are much better positioned in terms of capital and liquidity. Dependence on short-term funding is down materially. Bank have greatly de-risked and de-leveraged their balance sheets, and non-core assets and operations that were amassed in the heady growth years before the financial crisis have been pruned back."Risk management practices around capital and liquidity have been strengthened significantly. Accounting changes are supporting banker's ability to build countercyclical buffers against future expected credit losses."The focus now is on non-financial risk. These include cyber risk, conduct, fraud, financial crime and money laundering."The respondents said strengthening financial risk management was relatively straightforward because it was driven by changing regulation. Managing non-financial risks may be more challenging, often because they involve third parties or they incorporate new business models, based around machine learning and artificial intelligence, that come with many unknowns.The biggest risk respondents identified was protecting customers' privacy. The difficulty in dealing with privacy risk is compounded by the numerous cases where the bank did not suffer a breach but rather a third party did.Developments such as Open Banking, which give customers control over their data, create significant new challenges relating to data capture, use, movement and deletion.The biggest emerging risk is climate change and the environment. Seventy-nine per cent said they had incorporated climate change policies in their risk management approach.Australia's big banks are among a number of institutions that have committed to the recently launched United Nations Principles of Responsible banking Eighty per cent said a system-wide "attack" was likely in the next five years.Big risk management tasks include adapting to the cloud and introducing artificial intelligence and machine learning into banking operations. Banks and regulators worry about the risk to customer and bank data in moving to the cloud.Maintaining the availability of the data is also a big concern.