Digital identity vendor Entrust has bought fraud-detection specialist Business Signatures for $50 million in cash.

The deal will see Business Signatures' real-time fraud detection technology added to Entrust's IdentityGuard authentication platform.

The deal is just the latest marriage between authentication and anti-fraud vendors, amid demand for strong authentication technology ahead of a January 1, 2007, deadline to comply with guidance from the Federal Financial Institutions Examination Council (FFIEC).

Business Signatures was founded in 2001, has around 40 employees, and counts Citibank and H&R Block as customers.

Its technology scans and analyses HTTP data streams created by Web transactions, and the company claims it can spot fraudulent wire transfers, bill payments, account hijackings as well as "man in the middle" attacks and the activity of Trojan horse programs.

Warnings and alerts can then be sent to fraud officers, who can stop bad transactions before they clear, said Entrust's CTO Chris Voice.

The technology captures transaction traffic passively and doesn't require complicated integrations with existing business applications to work - something the company says is an asset for financial services companies that want to comply with FFIEC without having to tweak legacy applications on the back end.