I understand and appreciate the distinction you draw between institrutional and individual racism. Obviously, they go hand-in-hand and are self-replicating.
But since (after 500-plus years) white supremacy is so deeply embedded within "white" peoples' soul and psyche, many if not most of them are simply no longer able to see themselves as "privileged" and certainly not as "racist." Rather, they see themselves as just "normal" and their privileged position in society as a matter of their own "hard work" or "good luck."
Some thinkers and researchers call this phenomenon "unconscious bias."
That's why when they are challenged, they will often go into a kind of "what-about-ism." What about the racism of the Japanese against other Asians? Or the American "Indians" who couldn't stop fighting each other long enough to see that their real enemy was the invading European? Or their favorite: the various African tribal wars past and present? Aren't each of these a kind of "racism"? And thus not really different from what "white" people have done but on a larger, indeed global, scale? Normal.