Empowering zakat management through the viability of the financial technology

Mohd Salimin, Mohd Ariff and Redzuan, Nur Harena (2025) Empowering zakat management through the viability of the financial technology. In: International Conference on Business and Technology (ICBTOxford’2024), 21-22 November 2024, Oxford, United Kingdom.

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Abstract

Zakat, also known as almsgiving, is one of the five pillars in Islam that all qualified Muslims are required to observe. It involves the payment of a specific percentage of a Muslim’s income or wealth for the benefit of the Muslim community. While financial technology (fintech), refers to technological innovation in the financial system. Fintech is regarded as a powerful tool that can enhance the current zakat management system due to its ability to facilitate financial transactions in a more convenient, transparent, cost-effective, and flexible manner. This study aims to explore the viability of the fintech implementation by zakat institutions in Malaysia, as well as assess the opportunities and challenges that fintech presents for enhancing zakat management within these institutions. This study uses a qualitative approach, gathering primary data through in-depth analyses of structured interviews with selected respondents. Ten individuals were chosen in total: five zakat officers and five zakat payers. The interviews were conducted separately with each group to capture their thoughts and perspectives. The study discovers that zakat institutions effectively use fintech in their zakat management systems for both collection and distribution. These institutions offer various payment methods, which differ among the 14 zakat institutions. However, it was observed that the implementation of fintech in zakat distribution is not as comprehensive as in zakat collection. This disparity is largely attributed to digital illiteracy among zakat beneficiaries. Furthermore, the use of blockchain technology in zakat management remains unexplored, with no current practical implementations in zakat institutions. This research enhances the zakat management system by exploring the potential of fintech integration while proposing solutions to the challenges faced by zakat institutions in adopting fintech.

Item Type:	Proceeding Paper (Other)
Uncontrolled Keywords:	Zakat management, fintech, blockchain, digitalization.
Subjects:	BPH Islamic Economics > BPH531 Zakat H Social Sciences > HG Finance > HG3368 Islamic Banking and Finance T Technology > T Technology (General) > T173.5 Technology and Islam
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button):	Institute of Islamic Banking & Finance (IIiBF)
Depositing User:	Nur Harena Redzuan
Date Deposited:	05 Aug 2025 15:34
Last Modified:	05 Aug 2025 15:34
URI:	http://irep.iium.edu.my/id/eprint/122477

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