AI Could Optimise $1.2 Trillion Zakat and Waqf Potential, Says Expert

BANTEN — Dr. Marjan Muhammad, Deputy President of Research at ISRA Institute, INCEIF University, has said that artificial intelligence (AI) is one of the technologies capable of strengthening the transformation of Islamic social finance. According to him, the combined global potential of zakat and waqf funds is estimated to exceed US$1.2 trillion each year, yet its utilisation still faces challenges in governance and data management.

“The opportunity is enormous because the combined potential of zakat and waqf is estimated at more than US$1.2 trillion per year. Even a relatively small improvement in efficiency could deliver significant social impact,” Marjan said at Menara Syariah PIK II, Tangerang, Banten, on Wednesday (5/8/2026).

Marjan explained that most of the challenges in managing zakat and waqf today relate to data governance, information, and coordination between institutions. For this reason, AI is considered capable of providing solutions to improve the quality of Islamic social finance management.

According to him, AI can be used to project potential zakat collection, accelerate the verification of beneficiaries, improve the accuracy of distribution, and strengthen the transparency and accountability of zakat and waqf management institutions. The technology can also help detect potential irregularities, making governance more effective.

Nevertheless, Marjan emphasised that AI must not replace the human role in decision-making. “AI should strengthen human judgement, not replace it. Technology is still technology. Technology must not override the human faculty of reasoning bestowed by Allah,” he asserted.

He also believes AI development must proceed hand in hand with the formulation of sharia governance so that technological innovation remains aligned with sharia principles. “At present, we do not yet have comprehensive sharia guidelines on AI, particularly in Islamic social finance. Therefore, the development of governance frameworks must be carried out simultaneously with the adoption of technology, not afterwards,” he said.

Marjan added that this transformation cannot be achieved by one party alone. In his view, collaboration among regulators, academics, technology providers, and Islamic social finance institutions is key to building an AI ecosystem that is more trusted, transparent, inclusive, and delivers broader benefits.