The Advanced Measurement Approaches (AMA) is the bank’s internal operational risk measurement system using the quantitative and qualitative criteria. AMA’s qualifying factors makes a bank’s risk assessments more forward-looking and reflective of the quality of control and operating environments.
Reference Definition by Wikipedia: Advanced measurement approaches (AMA) is one of three possible operational risk methods that can be used under Basel II by a bank or other financial institution. The other two are the Basic Indicator Approach and the Standardised Approach. The methods (or approaches) increase in sophistication and risk sensitivity with AMA being the most advanced of the three. According to the BCBS Supervisory Guidelines, an AMA framework must include the use of four data elements: (i) Internal loss data (ILD), (ii) External data (ED), (iii) Scenario analysis (SBA), and (iv) Business environment and internal control factors (BEICFs).
