It does but (i) I’m not sure how many people actually trust it, (ii) it’s limited to GBP100k per customer per institution I think, assuming they are UK regulate

It does but (i) I’m not sure how many people actually trust it, (ii) it’s limited to GBP100k per customer per institution I think, assuming they are UK regulated banks, so they may struggle to get big deposits and (iii) the time and administrative hassle of getting your money back may be a problem. The experience during the crisis was that it took months for some people to regain access to their money in some instances, even though it was covered by one scheme or another. That is supposed to have been improved upon since, but it hasn’t been tested with a large scale bank failure and it’s not clear if a mass migration of accounts could even be done seamlessly. Eg see the catastrophe of TSB trying to change their own backend in an operation which had been planned for years. In the mean time, people might miss mortgage and other critical payments for example, and for most people I suspect it just isn’t worth the risk. I certainly wouldn’t risk it with my own money.