If they are using LN or some other off chain solution there are using some kind of bank by another name.
Depending on how it is realized a Lightning network doesn't have to be like a conventional bank because your ability to get your money back (and the inability of the bank to use your money other than under your direction) is enforced by smart contracts.
But that depends on a secure and high capacity main chain to execute the smart contractsIf they are using a side chain they are using an alt-coin by another name
Agree and I haven't seen any proposals for how these are even going to be done well by altcoin standards. The proposals I've seen are merged mining and a closed group of block signers.