Using FFT as a channeliser This article mentions that the DFT/FFT can be used as a channeliser in a similar way to a filterbank. I get how the DFT filters into spectral bins, but its output is in the frequency domain, i.e. Fourier coefficients, nolonger in the time domain, so either I'm missing something or they've neglected to mention that DFT filterbank output would need to be transformed back to the time domain to function like an actual filterbank. Can someone shed light on this?
First, I suggest you take a look at the STFT.  

Let say you use $N$-point FFT, then you filterbank has $N/2$ filters (assuming real signal). Usually, you divide your signal into $K$ segments, each $N$ samples long (could be overlapping) and apply the FFT to each segment. Every time you apply the FFT you get a single sample for each filter. Therefore your filterbank has $N/2$ filters with $K$ samples.