It depends a bit on where in the world you are, but Eu regulations require national funds, paid by the participant banks, which will pay back any lost monetary assets lost up to 100'000â (exceptions with higher limits exist and stocks/obligations have different regulations) in case your bank goes titsup.
They even specifiy how many days the fund has to pay you back, so you are generally well covered.
That middle man is also required to intervene in case your gran is obviously getting scammed or other cases of abuse.
So yeah the middle man is expensive and rather complex, but it does have advantages.
I mean, you can even lose your savings book and still have access to your money. Crazy, right?