Digitalisation of Zakat Management System in Malaysia: Potential and Challenges

Abstract

The Industrial Revolution 4.0 has contributed to the rapid development of information and communication technology. The result of various online applications and social media platforms has had a positive impact on human life. This development also indirectly contributes to the change in the pattern of services of social institutions such as zakat, especially involving the digital segment. Although there is an increase in the collection and distribution of zakat reported, specific issues often underlie the public's perception of the zakat management system. Therefore, this study is important in exploring the potential and challenges of digital platforms to improve the quality of services of zakat institutions in Malaysia, and further suggest improvements to ensure that zakat institutions remain competitive and relevant to current technological developments. This study aims to identify the potential and challenges of the implementation of the digital segment in the zakat management system in Malaysia. By using qualitative research, this study highlights the primary and secondary sources related to the digitisation of zakat. On top of that, this study reviewed the digitalisation approach implemented by each state on zakat's state website. The results of the data are then analyzed inductively to summarize the potential and challenges during the digitization of zakat in Malaysia. The findings summarise the adaptation potential of the digitalisation segment, which is large and still under-explored in each state. Ultimately, the adaptation of the digitalisation segment in zakat management has the potential to increase the efficiency and effectiveness of the quality of services of zakat institutions in Malaysia. Further field research is proposed to obtain more authentic data related to the direction and implementation of digital platforms on the sustainability of the development of zakat services in Malaysia.