BEIJING - China remains the most attractive market for venture capital (VC) investors in financial technology (fintech), despite sluggish global growth in the third quarter of the year, according to a report jointly-published by KPMG and CB Insights Thursday.

VC-backed fintech companies in China inked 12 deals in the third quarter, worth a total of over $1 billion, a 67 percent increase year on year. Last year there were 13 deals worth a total of $600 million in the same period.

Benefiting from strong performance in the Chinese market, VC investments in Asian fintech companies registered a 50 percent increase, although the number of deals declined to its lowest in 15 months.

Globally, funding in VC-backed fintech companies declined 17 percent to $2.4 billion in Q3. The number of deals during the period also dropped 12 percent year on year.

In China investors continue to focus on payments and lending, although areas such as insurance using technology (InsurTech) are starting to gain attraction.

The report highlights China's shift toward using mobile phones to make small transactions, with retailers opting for online payment instead of cash.

This was echoed during the Singles' Day shopping spree on November 11, where over 80 percent of the 120-billion yuan ($17.6 billion) turnover was transacted on mobile phones.

Blockchain technology, such as is used in virtual currencies, has also gained attention with growing popularity in terms of payments and lending services, the report said.

"Blockchain is becoming very hot as banks and financial institutions examine best practices and look closely at what international companies are doing in the space," said Raymond Cheong, partner of KPMG China. "VC investors are putting a lot of money into small blockchain technology companies in Asia; some very new companies are already into their second or third round of funding."

For the whole year, the report expect Asia-based fintech investment to top last year's record of $4.8 billion.