Technology giant IBM has acquired IRIS Analytics, a Germany-based company specializing in real-time analytics, to combat payment fraud.

Founded in 2007, IRIS offers a real-time fraud analytics engine that uses machine learning to generate rapid anti-fraud model and supports the creation and modification of ad-hoc models.

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IRIS applies machine learning models to identify fraud and act quickly to help reduce fraudulent events. It acts as a virtual analyst to identify new fraud patterns and bridges the gap between expert-driven rules and traditional predictive modeling by applying artificial intelligence and cognitive techniques.

Financial terms of the transaction have not been disclosed.

According to a recent global IBM Institute of Business Value study, only 16% of banks could detect fraud as it was happening.

IBM general manager for industry solutions Alistair Rennie said: "By integrating IRIS Analytics with IBM’s counter fraud technology, we will help organizations more accurately detect fraud at scale and speed so that they are in a position to implement countermeasures quickly, with more control and transparency, while at the same time assists with dramatically lowering false positives."

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IRIS Analytics CEO Constantin von Altrock said: "As the payments industry evolves with new payments methods such as chip and PIN, mobile payments and immediate payments, the ability for financial institutions to accurately make decisions about what is suspicious and what is legitimate before the payment is executed is required.

"The combination of IRIS technology with IBM’s Counter Fraud capabilities creates a comprehensive solution for real time payment fraud prevention."