The modern infrastructure of the smart grid minimises the power losses and maintain the electric power flow closer to nominal values. It enables the bidirectional flow of energy between consumer end and generation end along with a communication flow. Due to increasing number of smart grid equipment, it is important to investigate security protection and appropriate recovery measures for the smart grid application. Cyber security measures are important to consider for improving the reliability and intelligence features of the smart grid. This paper investigated the security measurements and different standards to counter the future security threats to the smart grid power systems. False data injection and risk analysis is carried out along with an internet of thing (IoT) based security solution to increase the reliability of data flow and communication on the smart grid. The investigations are performed by creating a power system model on a MATALB/Simulink environment.