Digital Zakat Innovation and Sharia Fintech: Governance Challenges and Economic Opportunities in Indonesia

Abstract

Indonesia's rapid growth of the digital economy has fundamentally changed the landscape of Islamic social finance mobilization, demanding immediate adaptation from zakat management institutions. Although the potential for national zakat is estimated to reach Rp 327 trillion per year, the realization of collection through formal channels is still low due to the gap in trust and accessibility. This study explores how sharia-based financial technology (sharia fintech) facilitates digital zakat innovation, with an emphasis on trust building mechanisms and data protection risk mitigation. Using a descriptive qualitative approach, this study combines literature analysis and semi-structured interviews with digital platform practitioners. The findings of the study reveal three main innovation clusters: (1) the integration of digital payment channels for transaction efficiency, (2)  the crowdfunding model  of the zakat program to increase the emotional attachment of muzakki, and (3) real-time tracking features  to strengthen transparency. The study proposes a digital readiness framework that includes user experience, substantive sharia compliance, and rigorous data governance to guide stakeholders in improving sustainable social finance inclusion