Institutional banking can be a complex space for even the most experienced banking professional. Here, Phil Mason, UMB president of institutional banking, explains this business and how it fits within UMB’s overall strategy.
To understand institutional banking, it helps to first take a step back and consider UMB as a whole. UMB is a large, regional bank with $71.8 billion in assets as of June 30, 2025. We serve the central Midwest, upper Midwest and Southwest. At our core, UMB is a commercial bank. Like our regional bank peers, we offer consumer and private wealth services as well, but unlike most of our peers, we also offer institutional banking services.
At UMB, our history and stability are some of our key strengths. We’re a 112-year-old bank with a fourth-generation leader, CEO and Chairman of UMB Financial Corporation Mariner Kemper. We’ve weathered two pandemics, the Great Depression, the 2008 economic crisis and recent regional bank upheaval – and in each of these challenging situations, we didn’t just survive, we grew stronger.
Key differentiators and how institutional banking fits in
Our credit culture is critical to our success and our credit quality is above our peer median year after year, driven mainly through our relationship-focused approach. By understanding our clients, we can make credit decisions more nimbly. Strong relationships are a core value for all lines of business and business operation units at UMB.
The volume of revenue generated from fee income is also a differentiator for UMB in that the percentage we derive from fees is outsized compared to peers. Our peers generate approximately 20% of their revenue from fees, whereas the percentage of our revenue that comes from fees has historically been in the high 30s. In the first half of 2025, 55% of UMB’s total fee income was generated by the institutional banking division, making it a critical contributor to the bank’s revenue.
UMB also has diverse ways to generate deposits. Most of our peers generate most of their deposits in a traditional way: the commercial banking group brings in deposits from their customers, the treasury management team finds ways to grow those commercial deposits, the branches conduct deposit campaigns, etc. UMB does all that as well and we have institutional banking verticals like corporate trust, investor solutions, institutional custody and healthcare services that also drive deposits.
A view into institutional banking focus areas
To begin, institutional banking is geographically different from other UMB businesses in that we’re not regionally concentrated. We operate coast-to-coast and are comprised of six primary verticals:
- UMB Capital Markets Division: This group manages all things fixed income, meaning bonds and related instruments. Their work includes sales, trading, and underwriting of fixed income securities. We sell many of those to downstream banks that are smaller than us, as well as tier two and tier three asset managers. Some other businesses are contained within the capital market space as well, such as repurchase agreements, foreign exchange and our financial services group.
- Corporate trust: This vertical has been a significant growth area for us. To sum it up, think of a really complex document or transaction that requires an intermediary or third party. That intermediary helps the flow of funds run smoothly – the team ensures all parties are paid on time, all transactions are appropriately documented and so much more. These transactions span the spectrum. They can be as simple as a municipal bond that you might vote on at your next upcoming election, and as complex as trusts that involve documents and transactions related to airplanes for large, international airlines.
- Institutional & Fintech Banking Services: Think of this as backend banking services for large broker-dealers. If you’re a broker-dealer, your value proposition is what you’re doing on the investment side. You don’t want to be in the weeds of processes that are much more banking-related. We, on the other hand, are experts in this space and partner with these firms so they can stay focused on their clients.
- Healthcare services: This is largely focused on putting health savings accounts and other benefit accounts in the hands of consumers. Many may wonder why this work belongs in institutional banking. The answer is that the sale is very much a business-to-business transaction. You are selling to that employer, or you are selling through a broker or a third-party administrator, similar to the way the Institutional & Fintech Banking Services team sells to large broker-dealers or the corporate trust team sells to parties executing complex transactions.
- Fund services: This is backend work for all types of investment funds, such as mutual funds, private equity and real estate funds. Essentially, we’re managing the accounting, transfer agency and other administrative work, while ensuring financials are prepared, taxes are done, and audits are coordinated. Again, we handle this work so that the investment managers can focus on their areas of expertise.
- Institutional custody: This business often partners with the fund services business. In this capacity, we hold all the assets for the funds we work on. We also hold assets for many clients that aren’t related to the fund services business within the custody space as well. Typically, these are insurance companies, municipalities, etc. In custody, we safekeep the assets – which, as a bank, makes sense for us.
Custom products and genuine service
Within this area, many of the businesses we serve are operationally intense, meaning there are lots of transactions, money movement and many other operational processes that constitute the work we do for a client. In our role as a service provider, it’s imperative that we ensure we’re consistently building the business to have all the right controls and processes in place.
The way we solve for this challenge across institutional banking, but especially in the corporate trust and fund services space, is to right-size the services we offer. We don’t have a one-size-fits-all solution – instead, we customize our offerings based on the clients’ needs, which is something many of our competitors don’t do as well.
Another key differentiator for us is our single point of contact service model. While many of our competitors approach their offerings with a bigger, more standard service models, we have a single person our client can call. When they have a question or need help, they know exactly who to contact to run all the traps for them and get the answers they need.
Tenured talent sets us apart
Because the clients we serve are so specialized, they require a specialized skill set. To develop this skill set, our approach has been to bring associates in at entry levels and then grow them internally. That said, we certainly have cases where it has made sense to bring in outside hires, especially in leadership roles. Generally speaking, though, people who professionally “grow up” in these businesses within UMB excel, because not only do they understand the business itself, but they also understand how the overall business fits into UMB broadly, which is tremendously important. In addition, we have many team members with a great deal of passion around the single point of contact service, so as other providers have moved away from it, it’s a positive differentiator in terms of attracting and retaining talent.
As an industry, banking can be nuanced, and institutional banking occupies a particularly complex space within it. These complexities, however, deliver great value, are game-changing differentiators and a key component of UMB’s overall operations.
Beyond traditional banking, UMB offers deep expertise and consultative partnership across the institutional marketplace, from community banks and municipalities, to some of the largest corporations, broker-dealers and fund companies in the U.S. and abroad. Connect with us to see how we can support your goals.
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