What do a 334 year-old bank and a sparky startup have in common?
When Barclays acquired specialist lender Kensington nearly two years ago, many expected the smaller company to be absorbed and reshaped in the image of its corporate parent. Instead, the relationship has unfolded on an entirely different path, challenging common perceptions about acquisitions.
“There’s probably a presumption that a large corporate would consume a smaller lender and consolidate a lot of the operations,” admitted Frances Cassidy (pictured), head of mortgage intermediary partnerships at Barclays. “But that hasn’t happened at all. And actually, I think it's, it's just a real good, best in class example of how two very different businesses can work together and learn from each other.”
The marriage of Barclays and Kensington could be a case study in how to successfully partner with an entity that’s so wholly different from your own. Barclays, a 334 year-old bank, operating in over 40 countries and employing over 80,000 people – and Kensington, with 600 employees and originating approximately £1.9 billion, made it work.
For Cassidy, the decision to maintain Kensington as a separate, regulated entity was deliberate. The two organisations have vastly different structures, markets, and cultures, and Barclays opted to let those differences remain intact. Cassidy explained the separation as essential, allowing both entities to focus on their strengths without compromising their service models.
‘Barclays brings the scale and stability of a 330-year-old institution’
And, for many, the typical post-acquisition script involves consolidation - streamlining operations, merging systems, and often losing the acquired firm’s unique identity. In this case, however, Barclays took the road less travelled.
“Kensington operates like a startup,” Cassidy explained. “It’s nimble and able to test and learn quickly in a secure environment. Barclays brings the scale and stability of a 330-year-old institution. These are fundamentally different cultures.”
This contrast was part of the appeal for Barclays when acquiring Kensington, a specialist lender known for tackling complex cases. Cassidy explained here the importance of keeping these distinctions intact.
“We’re serving very different parts of the market,” she said. “It has to be complementary - never cannibalising each other’s business. It's a holistic offering, but serving different cohorts. Kensington manually underwrite and they're typically more complex cases. Keeping that in their environment is crucial to maintaining that service level and preserving each brand – a specialist, niche lender that does complex income.”
‘Our customers are the same across Barclays and Kensington’
While the two brands remain separate, they haven’t operated in silos. Shared knowledge and joint initiatives have enabled the entities to learn from one another without losing their individual identities.
“For myself and my team, our customers are the same across Barclays and Kensington,” Cassidy explained. “So, when we show up as a group, there’s a united front. But at the same time, we’re not trying to merge everything into one. It’s about striking the right balance. And then there's obviously the market funding. Kensington used to almost wholly depend on the securitisation market. They don't have to do that anymore, because it’s funded by Barclays - and that cost efficiency can be passed on to brokers, which is great for them.”
A key element of this balance is leveraging Kensington as a testing ground for innovation. The partnership has allowed Cassidy and her team to experiment with new ways of doing things, new ideas and proposed strategies.
“Kensington allows us to trial new concepts in a controlled environment,” she added. “It’s almost like having a secure sandbox to see what works before rolling it out at scale with Barclays.”
And this dynamic has driven tangible results. Cassidy points to the launch of mid-tier LTV products at Kensington as an example of an initiative that wouldn’t have been feasible in Barclays’ high-volume lending environment. However, maintaining separate operations isn’t without challenges. The decision to keep distinct marketing, sales, and operational teams requires careful resource allocation.
“As we align, we're absolutely learning from each other,” she said. “If new technologies are coming in, we're in a position that we can, as a group, understand that together. Where it might fit could be a decision that comes after that - or it could fit in both places. There are projects, both in Barclays and Kensington, that continue to invest in the broker experience.”
‘It’s a way to show the market that we’re united’
New technology for Barclays is on the cards too, with a broker front end system rolling out in 2025. As Cassidy explained, this is already in pilot – having been built with brokers for brokers.
And, as Cassidy added, joint events have become a practical way to foster collaboration while reinforcing the brands’ unique roles.
“We’ve recently had our strategic partner event where both Barclays and Kensington are present,” she added. “It’s a way to show the market that we’re united while still respecting the differences that make each brand valuable.”
Rethinking acquisition assumptions
This approach challenges the common assumption that integration equates to success. For Barclays and Kensington, the decision to avoid full-scale consolidation has instead highlighted the value of autonomy. But the strategy also comes with risks. By maintaining separate identities, the brands rely on their respective markets remaining stable. With Kensington pushing into the Prime buy-to-let space and Barclays holding steady in high-volume lending, the divergence only works if customer bases don’t overlap significantly.
The learning process between the two brands has been a significant benefit. Cassidy described it as “looking under the bonnet” of another lender’s operations.
“Being able to understand how a different organisation functions, from products to marketing to operations, is invaluable,” she explained. “It’s not just one-sided - both sides are learning and improving.”
‘We’ve shown that two very different businesses can coexist’
This collaborative spirit extends to shared technology initiatives. Barclays is rolling out a broker-focused front-end system developed with intermediary feedback, while Kensington’s existing platforms offer insights into potential pitfalls and improvements.
“Kensington’s rollout of their system four years ago taught us a lot about what works and what doesn’t,” Cassidy added. “That’s the kind of learning that benefits both sides.”
And, while the Barclays-Kensington partnership may not fit the traditional mould, it offers a compelling alternative. By preserving Kensington’s independence, Barclays has not only expanded its capabilities but also demonstrated that acquisitions don’t have to mean erasure.
“We’ve shown that two very different businesses can coexist and thrive together,” Cassidy explained. “It’s about respecting what each brings to the table and finding ways to leverage those strengths without compromising their identities.”
