Locally, yes it would be a database before it leaves the node, which is the whole reason why my project can operate the way it does on a 3rd party platform designed for virtual currency. 
It just so happens that this database is then able to transfer guaranteed value/liquidity to another database/bank/node in seconds and even find a route without a direct connection if needed without requiring nearly as much trust as with traditional banking/settlement rails. Lightning fixes the banking payment and settlement layer. 
We have a long way to go for every working fiat system to be replaced on a Bitcoin standard but it's important to be able to model the Bitcoin ecosystem relative to the current systems so that we know what we have and what we need. Money is Broken, but many of the systems in fait land are still fairly magical all things considered.
I'm tempted to write a book on exactly this topic but I have no time. If Bitcoin goes to 1mil I'm going to do it.