By Ignatius Low

THE financial landscape has changed irrevocably and things will never be the same again.

That is the first thing DBS chairman Koh Boon Hwee tells you as he starts speaking, and it is a line he will repeat at least 10 times over the next hour.

He wants you to remember it, because it will dictate the bank's strategy going into the global economic downturn and the way it deals with customers and staff in future.

For example, it was one of the main reasons why DBS is cutting 900 jobs - or 6 per cent of its workforce.

A hiring freeze was already in place and wage cuts had been considered. But this crisis required more drastic action.

'This is not a cyclical event for the industry where, after a while, we bounce back and everything is normal,' says the corporate titan.

'The change in the way that financial institutions operate is going to be permanent. A wage cut is a temporary solution because you must eventually put it back.'

What are the earth-shattering changes that have permanently altered the way banks operate?

Mr Koh reels off three - the growth of derivatives that allowed tremendous leverage, the securitisation of loans and an abundance of liquidity and cheap funds.

All three were factors which had driven the financial sector's growth in recent times, he explains. But they will now come under greater scrutiny, forcing changes in the industry.

So making the job cuts was 'not an easy decision', Mr Koh says. Especially since the jobs lost are not coming back.

'The easiest thing to do is not to do it. We already have the challenge of dealing with High Notes 5, why take this on at this time?'

But he says that the board and senior management needed to recognise that their job is 'not to dwell on the past or just deal with the present, it must be to position the bank for the future'.

The decision was also influenced by labour laws in the various countries that DBS operated. Pay cuts would be felt most in Singapore where wages are more flexible, adds Mr Koh.

Yet another key piece of the puzzle was identifying where the bank can be more efficient and productive - a theme insiders say Mr Koh has been focused on since becoming chairman in early 2006.

'The way the organisation has developed, there are certain things that no longer need to be done,' he says.

'When things are good, the nature of organisations is that duplication and overlaps develop. You can no longer afford that and there are some businesses which you know aren't going to come back.'

What businesses are those, you ask.

'Ah, that, I'm not telling you!' he says, laughing.