How to make decisions in a VUCA environment: volatility, uncertainty, complexity and ambiguity

What it is about

Gustavo Méndez, lead partner of the Financial Services industry at Deloitte Spanish Latin America, explained at the Third Annual Risk Conference (September 2025) how to make decisions in a VUCA (volatile, uncertain, complex and ambiguous) environment and what it means for Dominican financial institutions.

The 23 slides define the concept, review the economic context of the Dominican Republic (growth, the new tariff regime, inflation and credit), the country's risk landscape and risk management in financial institutions, and propose strategies to navigate the VUCA environment and monitor emerging risks.

Objectives

• Define the four elements of VUCA and why they must be addressed separately.
• Describe the economic context and the risk landscape of the Dominican Republic.
• Propose strategies for deciding and managing risks in an uncertain environment.

Key takeaways

1. Each VUCA element is unique: volatility (rapid and unexpected change), uncertainty (lack of predictability), complexity (many interrelated factors) and ambiguity (lack of clarity about the meaning of events) require different responses.
2. Financial institutions operate in a VUCA environment because of frequent regulatory changes, disruptive technological advances, cyber threats and global economic volatility.
3. The Dominican risk landscape includes extreme weather events, public debt and fiscal sustainability, poverty and inequality, scarcity of specialized talent and migration.
4. The strategies proposed are strategic flexibility with scenario planning, situational awareness, organizational agility and resilient leadership.
5. Proactive monitoring of emerging risks such as advanced cybersecurity and climate risks, and strengthening the risk management culture, are recommended.