Risk tolerances will naturally develop from your overall risk appetite, but they also need to be aligned with your organization’s goals and how much risk your organization is willing to take. Your organization might have a very low risk tolerance definition set for customer dissatisfaction, but if you’re attracting lots of high cost customers, then this policy isn’t in line with a discount business model.
When risk tolerances are aligned with both overall risk appetite and strategic goals, they will lower residual level of risk and contribute to achieving your strategic risk management goals.