It's not about being faith in banks.
It's just a matter that bitcoin can't really touch all those people even they like to use it as bitcoin can only be accessed online since it's digital currency.
Dollar (Cash) is the same way. The Bank only holds a small percentage of cash on hand at the bank. Everything else is digital.
People with no internet or smartphones use cash every day, don't know or care how banks store their money. Many of them never set foot in a bank, get paid in cash -> spend that cash. It works.