The article analyzes the reasons for the emergence of Regtech, in particular, the complexity and variability of legislation, the growth of regulatory costs of both financial institutions and regulators, the need for new technologies that would optimize operations to comply with regulatory requirements. Objectives, tools and main characteristics of RegTech analyzed. The division of RegTech technological processes into customer onboarding, constant monitoring, risk identification, and comprehensive reporting is defined. The key features of RegTech are analyzed, namely blockchain, data standardization, high costs, high compliance risks, risk management, importance. RegTech has the potential for a wide range of applications from financial regulation to monitoring corporations for compliance with environmental legislation. Therefore, RegTech gradually outgrows the boundaries of the FinTech sector and becomes a relatively independent direction.The driving forces of the "explosive" growth of the RegTech market are identified, which include the aggravation of the need for post-crisis regulatory changes and the increase in data flows from controlled organizations; growing complexity of regulatory requirements; minimization of growing costs for ensuring compliance with regulatory requirements and standards; technological progress and rapid implementation of advanced technologies; real-time transaction monitoring, threat analysis and secure identity verification; increasing the effectiveness of supervisory tools in order to support financial stability. Innovative trends in the development of RegTech are analyzed, which include the focus on natural language processing, the development of AML and the metauniverse, the spread of cryptocurrencies, distributed ledger technology, voice recognition technology, and geographic information systems. The growing emphasis on business efficiency is increasing the popularity of RegTech among financial institutions, which allows them to increase productivity by reducing regulatory costs, protecting digital data and meeting regulatory requirements.