Allowing more flexibility lets banks create an AMA reflective of their organization, and it promotes innovation in AMA approaches. But that flexibility makes banks more responsible for creating a solid and robust process rather than simply providing inputs to a supervisory-determined formula.
Operational risk management is a relatively new field, and a number of challenges remain, such as collecting sufficient and relevant data and developing appropriate modeling techniques to capture low probability events of high severity. Naturally, validating the techniques used in the AMA is also very important, as with any quantitative models.