Building a Technology-Based Islamic Public and Social Finance Ecosystem
Islamic public and social finance is an important instrument for realising public welfare through the management of zakat, infak, sedekah, and wakaf (ZISWAF) funds. In Indonesia, the potential for ZISWAF fund collection is very large, but actual collection remains suboptimal. One of the causes is the limitation of supporting infrastructure, such as unintegrated information systems, varied management transparency, and low interoperability among ZISWAF management institutions.
Amidst the development of digital transformation, technological advances such as Blockchain, Artificial Intelligence (AI), and sharia fintech open new opportunities to build a more transparent, efficient, inclusive, and accountable Islamic social finance ecosystem. This transformation is not only oriented towards operational efficiency but also supports the realisation of the principles of justice (al-’adl), public benefit (maslahah), and trustworthiness (amanah) that form the main foundation of Islamic economics.
Blockchain is considered one of the most potential technologies for strengthening ZISWAF infrastructure because of its distributed ledger characteristics, where all transactions are recorded permanently, are immutable, and can be verified by all parties with access. In the context of zakat and wakaf management, blockchain allows every fund flow—from collection and management to distribution to mustahik or beneficiaries—to be traced in real time.
Thus, the public can clearly see how the funds they channel are managed. This transparency has the potential to increase public trust in ZISWAF management institutions while minimising the risk of data manipulation or misuse of funds. From a sharia perspective, the characteristics of blockchain are also aligned with the principles of accountability (hisab), openness, and responsibility (amanah).
In addition to blockchain, Artificial Intelligence (AI) offers data analysis capabilities that are highly needed in modern Islamic social finance management. AI can process large amounts of data to identify prospective mustahik who genuinely need assistance, predict the potential for zakat collection in a region, optimise fund distribution based on poverty levels, and detect transactions that potentially contain irregularities. The use of AI can also improve the quality of decision-making because it is based on more objective and faster data analysis compared to manual processes. However, the implementation of AI in sharia finance must still pay attention to governance principles, personal data protection, and compliance with sharia values so that the algorithms used do not cause discrimination or injustice in the process of distributing social funds.
The role of sharia fintech is also increasingly strategic in strengthening the ZISWAF ecosystem in Indonesia. The presence of various digital payment platforms, electronic wallets, sharia crowdfunding services, and mobile banking has made it easier for the public to pay zakat, infak, sedekah, and wakaf anytime and anywhere. This digitalisation has successfully expanded access to Islamic social finance services, especially for the younger generation accustomed to using digital technology in daily activities. The integration of ZISWAF features into digital banking services also shows that collaboration between sharia financial institutions and ZISWAF management bodies can increase fund collection efficiency while expanding sharia financial inclusion. With lower transaction costs and faster processes, sharia fintech is an important infrastructure for strengthening the sustainable collection of Islamic social funds.
Nevertheless, the implementation of these three technologies still faces a number of challenges. From a regulatory perspective, there is no comprehensive legal framework governing the use of blockchain and AI in Islamic social finance management. In addition, the readiness of human resources in ZISWAF management institutions also varies, especially in terms of digital literacy, cybersecurity, and data management. Another challenge is the lack of integration of databases for muzaki, mustahik, wakaf managers (nadzir), and zakat management institutions at the national level, leading to data duplication and suboptimal distribution of aid. Therefore, digital transformation does not rely solely on technology but also requires regulatory strengthening, human resource capacity building, information system standardisation, and better coordination between the government, regulators, ZISWAF institutions, and the sharia fintech industry.
The integration of blockchain, AI, and sharia fintech is not intended to replace the human role in managing Islamic social finance but rather to strengthen the quality of existing governance. Blockchain can serve as a transparent recording system, AI as a data analysis and decision-making tool, while sharia fintech acts as a medium to facilitate fund collection and distribution to the public. The synergy of these three technologies will create an interconnected digital ecosystem so that the processes of fund collection, management, reporting, auditing, and programme evaluation of ZISWAF can be carried out more effectively. In this way, ZISWAF management institutions can increase accountability while strengthening public trust as a key factor in boosting community participation.