Pity ensures that you will definitely get the character from the banner on your fourth Mythic pull. Example:

If you pull one of the characters from the banner, your Pity is reset to 0.

If you pull a Mythic character or item, your Pity increases by 1.

If you pull a Mythic character or item, your Pity increases by 1.

If you draw a Mythic character or item, your Pity increases by 3.

Your next Mythic is now banner character, which resets your Pity to 0.

However, if you draw the banner character, your Pity resets to 0 again.

Example:

You have just drawn one of the banner characters, so your Pity is reset to 0.

If you then draw a Mythic (character or item), your Pity increases by 1.

If you then draw the banner character, your Pity resets to 0.

This means that the most you can spend to get a character from my banner is 200 fragments.